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CREDIT TRANSACTIONS – II. COMMON CARRIERS IN GENERAL (A.

Civil Code definition of a common carrier; Tests)


Cases
G.R. No. L-47822 December 22, 1988 Only 150 boxes of Liberty filled milk were The Court of Appeals reversed the judgment of
delivered to petitioner. The other 600 boxes the trial court and held that respondent had been
PEDRO DE GUZMAN, petitioner, never reached petitioner, since the truck which engaged in transporting return loads of freight
vs. carried these boxes was hijacked somewhere "as a casual
COURT OF APPEALS and ERNESTO along the MacArthur Highway in Paniqui, Tarlac, occupation — a sideline to his scrap iron
CENDANA, respondents. by armed men who took with them the truck, its business" and not as a common carrier.
driver, his helper and the cargo. Petitioner came to this Court by way of a Petition
for Review assigning as errors the following
FELICIANO, J.:
On 6 January 1971, petitioner commenced conclusions of the Court of Appeals:
action against private respondent in the Court of
Respondent Ernesto Cendana, a junk dealer,
First Instance of Pangasinan, demanding 1. that private respondent was
was engaged in buying up used bottles and
scrap metal in Pangasinan. Upon gathering payment of P 22,150.00, the claimed value of not a common carrier;
the lost merchandise, plus damages and
sufficient quantities of such scrap material,
attorney's fees. Petitioner argued that private 2. that the hijacking of
respondent would bring such material to Manila
respondent, being a common carrier, and having respondent's truck was force
for resale. He utilized two (2) six-wheeler trucks
failed to exercise the extraordinary diligence majeure; and
which he owned for hauling the material to
required of him by the law, should be held liable
Manila. On the return trip to Pangasinan,
respondent would load his vehicles with cargo for the value of the undelivered goods. 3. that respondent was not liable
which various merchants wanted delivered to for the value of the undelivered
differing establishments in Pangasinan. For that In his Answer, private respondent denied that he cargo. (Rollo, p. 111)
service, respondent charged freight rates which was a common carrier and argued that he could
were commonly lower than regular commercial not be held responsible for the value of the lost
We consider first the issue of whether or not
rates. goods, such loss having been due to force
private respondent Ernesto Cendana may, under
majeure. the facts earlier set forth, be properly
Sometime in November 1970, petitioner Pedro characterized as a common carrier.
de Guzman a merchant and authorized dealer of On 10 December 1975, the trial court rendered a
1
General Milk Company (Philippines), Inc. in Decision finding private respondent to be a
The Civil Code defines "common carriers" in the
Urdaneta, Pangasinan, contracted with common carrier and holding him liable for the
following terms:
respondent for the hauling of 750 cartons of value of the undelivered goods (P 22,150.00) as
Liberty filled milk from a warehouse of General well as for P 4,000.00 as damages and P
2,000.00 as attorney's fees. Article 1732. Common carriers
Milk in Makati, Rizal, to petitioner's
are persons, corporations, firms
establishment in Urdaneta on or before 4
or associations engaged in the
December 1970. Accordingly, on 1 December On appeal before the Court of Appeals,
business of carrying or
1970, respondent loaded in Makati the respondent urged that the trial court had erred in
transporting passengers or
merchandise on to his trucks: 150 cartons were considering him a common carrier; in finding that
goods or both, by land, water, or
loaded on a truck driven by respondent himself, he had habitually offered trucking services to the
air for compensation, offering
while 600 cartons were placed on board the public; in not exempting him from liability on the
their services to the public.
other truck which was driven by Manuel Estrada, ground of force majeure; and in ordering him to
respondent's driver and employee. pay damages and attorney's fees.
The above article makes no distinction between
one whose principal business activity is the
carrying of persons or goods or both, and one

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CREDIT TRANSACTIONS – II. COMMON CARRIERS IN GENERAL (A. Civil Code definition of a common carrier; Tests)
Cases
who does such carrying only as express service, steamboat, or complied with the requirements of the applicable
an ancillary activity (in local Idiom as "a steamship line, pontines, ferries regulatory statute and implementing regulations
sideline"). Article 1732 also carefully avoids and water craft, engaged in the and has been granted a certificate of public
making any distinction between a person or transportation of passengers or convenience or other franchise. To exempt
enterprise offering transportation service on freight or both, shipyard, marine private respondent from the liabilities of a
a regular or scheduled basis and one offering repair shop, wharf or dock, ice common carrier because he has not secured the
such service on an occasional, episodic or plant, necessary certificate of public convenience,
unscheduled basis. Neither does Article 1732 ice-refrigeration plant, canal, would be offensive to sound public policy; that
distinguish between a carrier offering its services irrigation system, gas, electric would be to reward private respondent precisely
to the "general public," i.e., the general light, heat and power, water for failing to comply with applicable statutory
community or population, and one who offers supply and power petroleum, requirements. The business of a common carrier
services or solicits business only from a narrow sewerage system, wire or impinges directly and intimately upon the safety
segment of the general population. We think that wireless communications and well being and property of those members
Article 1733 deliberaom making such systems, wire or wireless of the general community who happen to deal
distinctions. broadcasting stations and other with such carrier. The law imposes duties and
similar public services. ... liabilities upon common carriers for the safety
So understood, the concept of "common carrier" (Emphasis supplied) and protection of those who utilize their services
under Article 1732 may be seen to coincide and the law cannot allow a common carrier to
neatly with the notion of "public service," under It appears to the Court that private respondent is render such duties and liabilities merely
the Public Service Act (Commonwealth Act No. properly characterized as a common carrier facultative by simply failing to obtain the
1416, as amended) which at least partially even though he merely "back-hauled" goods for necessary permits and authorizations.
supplements the law on common carriers set other merchants from Manila to Pangasinan,
forth in the Civil Code. Under Section 13, although such back-hauling was done on a We turn then to the liability of private respondent
paragraph (b) of the Public Service Act, "public periodic or occasional rather than regular or as a common carrier.
service" includes: scheduled manner, and even though private
respondent's principal occupation was not the Common carriers, "by the nature of their
... every person that now or carriage of goods for others. There is no dispute 2
business and for reasons of public policy" are
hereafter may own, operate, that private respondent charged his customers a held to a very high degree of care and diligence
manage, or control in the fee for hauling their goods; that fee frequently ("extraordinary diligence") in the carriage of
Philippines, for hire or fell below commercial freight rates is not relevant goods as well as of passengers. The specific
compensation, with general or here. import of extraordinary diligence in the care of
limited clientele, whether goods transported by a common carrier is,
permanent, occasional or The Court of Appeals referred to the fact that according to Article 1733, "further expressed in
accidental, and done for general private respondent held no certificate of public Articles 1734,1735 and 1745, numbers 5, 6 and
business purposes, any convenience, and concluded he was not a 7" of the Civil Code.
common carrier, railroad, street common carrier. This is palpable error. A
railway, traction railway, subway certificate of public convenience is not a Article 1734 establishes the general rule that
motor vehicle, either for freight requisite for the incurring of liability under the common carriers are responsible for the loss,
or passenger, or both, with or Civil Code provisions governing common destruction or deterioration of the goods which
without fixed route and whatever carriers. That liability arises the moment a they carry, "unless the same is due to any of the
may be its classification, freight person or firm acts as a common carrier, without following causes only:
or carrier service of any class, regard to whether or not such carrier has also

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CREDIT TRANSACTIONS – II. COMMON CARRIERS IN GENERAL (A. Civil Code definition of a common carrier; Tests)
Cases
(1) Flood, storm, earthquake, lightning or other however, may be overthrown by proof of (6) that the common carrier's liability for acts
natural disaster or calamity; extraordinary diligence on the part of private committed by thieves, or of robbers who
(2) Act of the public enemy in war, whether respondent. donot act with grave or irresistible threat,
international or civil; violence or force, is dispensed with or
(3) Act or omission of the shipper or owner of the Petitioner insists that private respondent had not diminished; and
goods; observed extraordinary diligence in the care of
(4) The character-of the goods or defects in the petitioner's goods. Petitioner argues that in the (7) that the common carrier shall not responsible
packing or-in the containers; and circumstances of this case, private respondent for the loss, destruction or deterioration of goods
(5) Order or act of competent public authority. should have hired a security guard presumably on account of the defective condition of the car
to ride with the truck carrying the 600 cartons of vehicle, ship, airplane or other equipment used
It is important to point out that the above list of Liberty filled milk. We do not believe, however, in the contract of carriage. (Emphasis supplied)
causes of loss, destruction or deterioration which that in the instant case, the standard of
exempt the common carrier for responsibility extraordinary diligence required private Under Article 1745 (6) above, a common carrier
therefor, is a closed list. Causes falling outside respondent to retain a security guard to ride with is held responsible — and will not be allowed to
the foregoing list, even if they appear to the truck and to engage brigands in a firelight at divest or to diminish such responsibility — even
constitute a species of force majeure fall within the risk of his own life and the lives of the driver for acts of strangers like thieves or
the scope of Article 1735, which provides as and his helper. robbers, except where such thieves or robbers in
follows: fact acted "with grave or irresistible threat,
The precise issue that we address here relates violence or force." We believe and so hold that
In all cases other than those to the specific requirements of the duty of the limits of the duty of extraordinary diligence in
mentioned in numbers 1, 2, 3, 4 extraordinary diligence in the vigilance over the the vigilance over the goods carried are reached
and 5 of the preceding article, if goods carried in the specific context of hijacking where the goods are lost as a result of a robbery
the goods are lost, destroyed or or armed robbery. which is attended by "grave or irresistible threat,
deteriorated, common carriers violence or force."
are presumed to have been at As noted earlier, the duty of extraordinary
fault or to have acted diligence in the vigilance over goods is, under In the instant case, armed men held up the
negligently, unless they prove Article 1733, given additional specification not second truck owned by private respondent which
that they observed extraordinary only by Articles 1734 and 1735 but also by carried petitioner's cargo. The record shows that
diligence as required in Article Article 1745, numbers 4, 5 and 6, Article 1745 an information for robbery in band was filed in
1733. (Emphasis supplied) provides in relevant part: the Court of First Instance of Tarlac, Branch 2, in
Criminal Case No. 198 entitled "People of the
Applying the above-quoted Articles 1734 and Any of the following or similar Philippines v. Felipe Boncorno, Napoleon
1735, we note firstly that the specific cause stipulations shall be considered Presno, Armando Mesina, Oscar Oria and one
alleged in the instant case — the hijacking of the unreasonable, unjust and John Doe." There, the accused were charged
carrier's truck — does not fall within any of the contrary to public policy: with willfully and unlawfully taking and carrying
five (5) categories of exempting causes listed in away with them the second truck, driven by
Article 1734. It would follow, therefore, that the Manuel Estrada and loaded with the 600 cartons
xxx xxx xxx
hijacking of the carrier's vehicle must be dealt of Liberty filled milk destined for delivery at
with under the provisions of Article 1735, in other petitioner's store in Urdaneta, Pangasinan. The
words, that the private respondent as common (5) that the common carrier shall not be decision of the trial court shows that the accused
carrier is presumed to have been at fault or to responsible for the acts or omissions of his or its acted with grave, if not irresistible, threat,
have acted negligently. This presumption, employees; 3
violence or force. Three (3) of the five (5) hold-

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CREDIT TRANSACTIONS – II. COMMON CARRIERS IN GENERAL (A. Civil Code definition of a common carrier; Tests)
Cases
uppers were armed with firearms. The robbers COURT OF APPEALS and RODOLFO A. WHEN PRESUMPTION OF NEGLIGENCE
not only took away the truck and its cargo but CIPRIANO, respondents. ARISES; HOW PRESUMPTION OVERCAME;
also kidnapped the driver and his helper, WHEN PRESUMPTION MADE ABSOLUTE. —
detaining them for several days and later SYLLABUS Common carriers are obliged to observe
releasing them in another province (in extraordinary diligence in the vigilance over the
Zambales). The hijacked truck was subsequently goods transported by them. Accordingly, they
1. CIVIL LAW; COMMON CARRIERS;
found by the police in Quezon City. The Court of DEFINED; TEST TO DETERMINE COMMON are presumed to have been at fault or to have
First Instance convicted all the accused of CARRIER. — Article 1732 of the Civil Code acted negligently if the goods are lost, destroyed
4
robbery, though not of robbery in band. or deteriorated. There are very few instances
defines a common carrier as "(a) person,
when the presumption of negligence does not
corporation or firm, or association engaged in
In these circumstances, we hold that the attach and these instances are enumerated in
the business of carrying or transporting
occurrence of the loss must reasonably be Article 1734. In those cases where the
passengers or goods or both, by land, water or
regarded as quite beyond the control of the presumption is applied, the common carrier must
air, for compensation, offering their services to
common carrier and properly regarded as a prove that it exercised extraordinary diligence in
the public." The test to determine a common
fortuitous event. It is necessary to recall that order to overcome the presumption . . . The
carrier is "whether the given undertaking is a
even common carriers are not made absolute presumption of negligence was raised against
part of the business engaged in by the carrier
insurers against all risks of travel and of petitioner. It was petitioner's burden to overcome
which he has held out to the general public as
transport of goods, and are not held liable for his occupation rather than the quantity or extent it. Thus, contrary to her assertion, private
acts or events which cannot be foreseen or are of the business transacted." . . . The holding of respondent need not introduce any evidence to
inevitable, provided that they shall have prove her negligence. Her own failure to adduce
the Court in De Guzman vs. Court of Appeals is
complied with the rigorous standard of sufficient proof of extraordinary diligence made
instructive. In referring to Article 1732 of the Civil
extraordinary diligence. Code, it held thus: "The above article makes no the presumption conclusive against her.
distinction between one whose principal
We, therefore, agree with the result reached by business activity is the carrying of persons or 3. ID.; ID.; HIJACKING OF GOODS; CARRIER
the Court of Appeals that private respondent goods or both, and one who does such carrying PRESUMED NEGLIGENT; HOW CARRIER
Cendana is not liable for the value of the only as an ancillary activity (in local idiom, as a ABSOLVED FROM LIABILITY. — In De
undelivered merchandise which was lost "sideline"). Article 1732 also carefully avoids Guzman vs. Court of Appeals, the Court held
because of an event entirely beyond private making any distinction between a person or that hijacking, not being included in the
respondent's control. enterprise offering transportation service on a provisions of Article 1734, must be dealt with
regular or scheduled basis and one offering such under the provisions of Article 1735 and thus,
service on an occasional, episodic or the common carrier is presumed to have been at
ACCORDINGLY, the Petition for Review on
unscheduled basis. Neither does Article 1732 fault or negligent. To exculpate the carrier from
certiorari is hereby DENIED and the Decision of
distinguished between a carrier offering its liability arising from hijacking, he must prove that
the Court of Appeals dated 3 August 1977 is
services to the "general public," i.e., the general the robbers or the hijackers acted with grave or
AFFIRMED. No pronouncement as to costs.
community or population, and one who offers irresistible threat, violence, or force. This is in
services or solicits business only from a narrow accordance with Article 1745 of the Civil Code
SO ORDERED. which provides: "Art. 1745. Any of the following
segment of the general population. We think that
Article 1732 deliberately refrained from making or similar stipulations shall be considered
G.R. No. 101089. April 7, 1993. such distinctions." unreasonable, unjust and contrary to public
policy . . . (6) That the common carrier's liability
ESTRELLITA M. BASCOS, petitioners, for acts committed by thieves, or of robbers who
2. ID.; ID.; DILIGENCE REQUIRED IN
vs. do not act with grave or irresistible threat,
VIGILANCE OVER GOODS TRANSPORTED;

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CREDIT TRANSACTIONS – II. COMMON CARRIERS IN GENERAL (A. Civil Code definition of a common carrier; Tests)
Cases
violences or force, is dispensed with or DEFINES IT TO BE. — Granting that the said 400 sacks of soya bean meal worth P156,404.00
diminished"; In the same case, the Supreme evidence were not self-serving, the same were from the Manila Port Area to Calamba, Laguna
Court also held that: "Under Article 1745 (6) not sufficient to prove that the contract was one at the rate of P50.00 per metric ton. Petitioner
above, a common carrier is held responsible — of lease. It must be understood that a contract is failed to deliver the said cargo. As a
and will not be allowed to divest or to diminish what the law defines it to be and not what it is consequence of that failure, Cipriano paid Jibfair
such responsibility — even for acts of strangers called by the contracting parties. Shipping Agency the amount of the lost goods in
like thieves or robbers, except where such accordance with the contract which stated that:
thieves or robbers in fact acted "with grave of DECISION
irresistible threat, violence of force," We believe "1. CIPTRADE shall be held liable and
and so hold that the limits of the duty of answerable for any loss in bags due to theft,
CAMPOS, JR., J p:
extraordinary diligence in the vigilance over the hijacking and non-delivery or damages to the
goods carried are reached where the goods are cargo during transport at market value, . . ." 3
lost as a result of a robbery which is attended by This is a petition for review on certiorari of the
"grave or irresistible threat, violence or force." decision ** of the Court of Appeals in
"RODOLFO A. CIPRIANO, doing business Cipriano demanded reimbursement from
under the name CIPRIANO TRADING petitioner but the latter refused to pay.
4. REMEDIAL LAW; EVIDENCE; JUDICIAL Eventually, Cipriano filed a complaint for a sum
ENTERPRISES plaintiff-appellee, vs.
ADMISSIONS CONCLUSIVE. — In this case, of money and damages with writ of preliminary
ESTRELLITA M. BASCOS, doing business
petitioner herself has made the admission that attachment 4 for breach of a contract of carriage.
under the name of BASCOS TRUCKING,
she was in the trucking business, offering her The prayer for a Writ of Preliminary Attachment
defendant-appellant," C.A.-G.R. CV No. 25216,
trucks to those with cargo to move. Judicial was supported by an affidavit 5 which contained
the dispositive portion of which is quoted
admissions are conclusive and no evidence is the following allegations:
hereunder:
required to prove the same.
"PREMISES considered, We find no reversible "4. That this action is one of those specifically
5. ID.; ID.; BURDEN OF PROOF RESTS WITH mentioned in Sec. 1, Rule 57 the Rules of Court,
error in the decision appealed from, which is
PARTY WHO ALLEGES A FACT. — Petitioner whereby a writ of preliminary attachment may
hereby affirmed in toto. Costs against appellant."
presented no other proof of the existence of the lawfully issue, namely:
1
contract of lease. He who alleges a fact has the
burden of proving it. "(e) in an action against a party who has
The facts, as gathered by this Court, are as
follows: removed or disposed of his property, or is about
6. ID.; ID.; AFFIDAVITS NOT CONSIDERED to do so, with intent to defraud his creditors;"
BEST EVIDENCE IF AFFIANTS AVAILABLE AS
WITNESSES. — While the affidavit of Juanito Rodolfo A. Cipriano representing Cipriano
Trading Enterprise (CIPTRADE for short) 5. That there is no sufficient security for the
Morden, the truck helper in the hijacked truck, claim sought to be enforced by the present
was presented as evidence in court, he himself entered into a hauling contract 2 with Jibfair
Shipping Agency Corporation whereby the action;
was a witness as could be gleaned from the
contents of the petition. Affidavits are not former bound itself to haul the latter's 2,000
considered the best evidence if the affiants are m/tons of soya bean meal from Magallanes 6. That the amount due to the plaintiff in the
available as witnesses. Drive, Del Pan, Manila to the warehouse of above-entitled case is above all legal
Purefoods Corporation in Calamba, Laguna. To counterclaims;"
carry out its obligation, CIPTRADE, through
7. CIVIL LAW; OBLIGATIONS AND
Rodolfo Cipriano, subcontracted with Estrellita The trial court granted the writ of preliminary
CONTRACTS; CONTRACT IS WHAT LAW
Bascos (petitioner) to transport and to deliver attachment on February 17, 1987.

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CREDIT TRANSACTIONS – II. COMMON CARRIERS IN GENERAL (A. Civil Code definition of a common carrier; Tests)
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In her answer, petitioner interposed the following SO ORDERED." 6 The Court of Appeals, in holding that petitioner
defenses: that there was no contract of carriage was a common carrier, found that she admitted
since CIPTRADE leased her cargo truck to load Petitioner appealed to the Court of Appeals but in her answer that she did business under the
the cargo from Manila Port Area to Laguna; that respondent Court affirmed the trial court's name A.M. Bascos Trucking and that said
CIPTRADE was liable to petitioner in the amount judgment. admission dispensed with the presentation by
of P11,000.00 for loading the cargo; that the private respondent, Rodolfo Cipriano, of proofs
truck carrying the cargo was hijacked along Consequently, petitioner filed this petition where that petitioner was a common carrier. The
Canonigo St., Paco, Manila on the night of she makes the following assignment of errors; to respondent Court also adopted in toto the trial
October 21, 1988; that the hijacking was court's decision that petitioner was a common
wit:
immediately reported to CIPTRADE and that carrier, Moreover, both courts appreciated the
petitioner and the police exerted all efforts to following pieces of evidence as indicators that
locate the hijacked properties; that after "I. THE RESPONDENT COURT ERRED IN petitioner was a common carrier: the fact that
preliminary investigation, an information for HOLDING THAT THE CONTRACTUAL the truck driver of petitioner, Maximo Sanglay,
robbery and carnapping were filed against Jose RELATIONSHIP BETWEEN PETITIONER AND received the cargo consisting of 400 bags of
Opriano, et al.; and that hijacking, being a force PRIVATE RESPONDENT WAS CARRIAGE OF soya bean meal as evidenced by a cargo receipt
majeure, exculpated petitioner from any liability GOODS AND NOT LEASE OF CARGO TRUCK. signed by Maximo Sanglay; the fact that the
to CIPTRADE. truck helper, Juanito Morden, was also an
II. GRANTING, EX GRATIA ARGUMENTI, employee of petitioner; and the fact that control
After trial, the trial court rendered a decision *** THAT THE FINDING OF THE RESPONDENT of the cargo was placed in petitioner's care.
the dispositive portion of which reads as follows: COURT THAT THE CONTRACTUAL
RELATIONSHIP BETWEEN PETITIONER AND In disputing the conclusion of the trial and
PRIVATE RESPONDENT WAS CARRIAGE OF appellate courts that petitioner was a common
"WHEREFORE, judgment is hereby rendered in
GOODS IS CORRECT, NEVERTHELESS, IT carrier, she alleged in this petition that the
favor of plaintiff and against defendant ordering
ERRED IN FINDING PETITIONER LIABLE contract between her and Rodolfo A. Cipriano,
the latter to pay the former: THEREUNDER BECAUSE THE LOSS OF THE representing CIPTRADE, was lease of the truck.
CARGO WAS DUE TO FORCE MAJEURE, She cited as evidence certain affidavits which
1. The amount of ONE HUNDRED FIFTY-SIX NAMELY, HIJACKING. referred to the contract as "lease". These
THOUSAND FOUR HUNDRED FOUR PESOS
affidavits were made by Jesus Bascos 8 and by
(P156,404.00) as an (sic) for actual damages
III. THE RESPONDENT COURT ERRED IN petitioner herself. 9 She further averred that
with legal interest of 12% per cent per annum to
AFFIRMING THE FINDING OF THE TRIAL Jesus Bascos confirmed in his testimony his
be counted from December 4, 1986 until fully
COURT THAT PETITIONER'S MOTION TO statement that the contract was a lease contract.
paid; DISSOLVE/LIFT THE WRIT OF PRELIMINARY 10 She also stated that: she was not catering to
ATTACHMENT HAS BEEN RENDERED MOOT the general public. Thus, in her answer to the
2. The amount of FIVE THOUSAND PESOS AND ACADEMIC BY THE DECISION OF THE amended complaint, she said that she does
(P5,000.00) as and for attorney's fees; and MERITS OF THE CASE." 7 business under the same style of A.M. Bascos
Trucking, offering her trucks for lease to those
3. The costs of the suit. The petition presents the following issues for who have cargo to move, not to the general
resolution: (1) was petitioner a common carrier?; public but to a few customers only in view of the
The "Urgent Motion To Dissolve/Lift preliminary and (2) was the hijacking referred to a force fact that it is only a small business. 11
Attachment" dated March 10, 1987 filed by majeure?
defendant is DENIED for being moot and We agree with the respondent Court in its finding
academic. that petitioner is a common carrier.

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CREDIT TRANSACTIONS – II. COMMON CARRIERS IN GENERAL (A. Civil Code definition of a common carrier; Tests)
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Article 1732 of the Civil Code defines a common carrier offering its services to the "general In this case, petitioner alleged that hijacking
carrier as "(a) person, corporation or firm, or public," i.e., the general community or constituted force majeure which exculpated her
association engaged in the business of carrying population, and one who offers services or from liability for the loss of the cargo. In De
or transporting passengers or goods or both, by solicits business only from a narrow segment of Guzman vs. Court of Appeals, 20 the Court held
land, water or air, for compensation, offering the general population. We think that Article that hijacking, not being included in the
their services to the public." The test to 1732 deliberately refrained from making such provisions of Article 1734, must be dealt with
determine a common carrier is "whether the distinctions." under the provisions of Article 1735 and thus,
given undertaking is a part of the business the common carrier is presumed to have been at
engaged in by the carrier which he has held out Regarding the affidavits presented by petitioner fault or negligent. To exculpate the carrier from
to the general public as his occupation rather to the court, both the trial and appellate courts liability arising from hijacking, he must prove that
than the quantity or extent of the business have dismissed them as self-serving and the robbers or the hijackers acted with grave or
transacted." 12 In this case, petitioner herself petitioner contests the conclusion. We are bound irresistible threat, violence, or force. This is in
has made the admission that she was in the by the appellate court's factual conclusions. Yet, accordance with Article 1745 of the Civil Code
trucking business, offering her trucks to those granting that the said evidence were not self- which provides:
with cargo to move. Judicial admissions are serving, the same were not sufficient to prove
conclusive and no evidence is required to prove that the contract was one of lease. It must be "Art. 1745. Any of the following or similar
the same. 13 understood that a contract is what the law stipulations shall be considered unreasonable,
defines it to be and not what it is called by the unjust and contrary to public policy;
But petitioner argues that there was only a contracting parties. 15 Furthermore, petitioner
contract of lease because they offer their presented no other proof of the existence of the xxx xxx xxx
services only to a select group of people and contract of lease. He who alleges a fact has the
because the private respondents, plaintiffs in the burden of proving it. 16 (6) That the common carrier's liability for acts
lower court, did not object to the presentation of committed by thieves, or of robbers who do not
affidavits by petitioner where the transaction was Likewise, We affirm the holding of the act with grave or irresistible threat, violences or
referred to as a lease contract. respondent court that the loss of the goods was force, is dispensed with or diminished;"
not due to force majeure.
Regarding the first contention, the holding of the
In the same case, 21 the Supreme Court also
Court in De Guzman vs. Court of Appeals 14 is Common carriers are obliged to observe held that:
instructive. In referring to Article 1732 of the Civil extraordinary diligence in the vigilance over the
Code, it held thus: goods transported by them. 17 Accordingly, they
"Under Article 1745 (6) above, a common carrier
are presumed to have been at fault or to have
is held responsible — and will not be allowed to
"The above article makes no distinction between acted negligently if the goods are lost, destroyed
divest or to diminish such responsibility — even
one whose principal business activity is the or deteriorated. 18 There are very few instances for acts of strangers like thieves or robbers
carrying of persons or goods or both, and one when the presumption of negligence does not except where such thieves or robbers in fact
who does such carrying only as an ancillary attach and these instances are enumerated in
acted with grave or irresistible threat, violence or
activity (in local idiom, as a "sideline"). Article Article 1734. 19 In those cases where the
force. We believe and so hold that the limits of
1732 also carefully avoids making any distinction presumption is applied, the common carrier must
the duty of extraordinary diligence in the
between a person or enterprise offering prove that it exercised extraordinary diligence in
vigilance over the goods carried are reached
transportation service on a regular or scheduled order to overcome the presumption. where the goods are lost as a result of a robbery
basis and one offering such service on an
which is attended by "grave or irresistible threat,
occasional, episodic or unscheduled basis.
violence or force."
Neither does Article 1732 distinguish between a

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To establish grave and irresistible force, Having affirmed the findings of the respondent Before us are two separate petitions for review
petitioner presented her accusatory affidavit, 22 Court on the substantial issues involved, We find filed by National Steel Corporation (NSC) and
Jesus Bascos' affidavit, 23 and Juanito Morden's no reason to disturb the conclusion that the Vlasons Shipping, Inc. (VSI), both of which
24 "Salaysay". However, both the trial court and motion to lift/dissolve the writ of preliminary assail the August 12, 1993 Decision of the Court
1
the Court of Appeals have concluded that these attachment has been rendered moot and of Appeals. The Court of Appeals modified the
affidavits were not enough to overcome the academic by the decision on the merits. decision of the Regional Trial Court of Pasig,
presumption. Petitioner's affidavit about the Metro Manila, Branch 163 in Civil Case No.
hijacking was based on what had been told her In the light of the foregoing analysis, it is Our 23317. The RTC disposed as follows:
by Juanito Morden. It was not a first-hand opinion that the petitioner's claim cannot be
account. While it had been admitted in court for sustained. The petition is DISMISSED and the WHEREFORE, judgment is hereby
lack of objection on the part of private decision of the Court of Appeals is hereby rendered in favor of defendant and
respondent, the respondent Court had discretion AFFIRMED. against the plaintiff dismissing the
in assigning weight to such evidence. We are complaint with cost against plaintiff, and
bound by the conclusion of the appellate court. ordering plaintiff to pay the defendant on
SO ORDERED.
In a petition for review on certiorari, We are not the counterclaim as follows:
to determine the probative value of evidence but
to resolve questions of law. Secondly, the G.R. No. 112287 December 12, 1997
1. The sum of P75,000.00 as unpaid
affidavit of Jesus Bascos did not dwell on how freight and P88,000.00 as demurrage
the hijacking took place. Thirdly, while the NATIONAL STEEL CORPORATION, petitioner,
with interest at the legal rate on both
affidavit of Juanito Morden, the truck helper in vs.
amounts from April 7, 1976 until the
the hijacked truck, was presented as evidence in COURT OF APPEALS AND VLASONS
same shall have been fully paid;
court, he himself was a witness as could be SHIPPING, INC., respondents.
gleaned from the contents of the petition.
Affidavits are not considered the best evidence if 2. Attorney's fees and expenses of
G.R. No. 112350 December 12, 1997
the affiants are available as witnesses. 25 The litigation in the sum of P100,000.00; and
subsequent filing of the information for VLASONS SHIPPING, INC., petitioner,
carnapping and robbery against the accused vs. 3. Costs of suit.
named in said affidavits did not necessarily COURT OF APPEALS AND NATIONAL STEEL 2
mean that the contents of the affidavits were true CORPORATION, respondents. SO ORDERED.
because they were yet to be determined in the
trial of the criminal cases. On the other hand, the Court of Appeals ruled:
PANGANIBAN, J.:
The presumption of negligence was raised WHEREFORE, premises considered,
The Court finds occasion to apply the rules on
against petitioner. It was petitioner's burden to the decision appealed from is modified
the seaworthiness of private carrier, its owner's
overcome it. Thus, contrary to her assertion, by reducing the award for demurrage to
responsibility for damage to the cargo and its
private respondent need not introduce any P44,000.00 and deleting the award for
liability for demurrage and attorney's fees. The
evidence to prove her negligence. Her own attorney's fees and expenses of
Court also reiterates the well-known rule that
failure to adduce sufficient proof of extraordinary litigation. Except as thus modified, the
findings of facts of trial courts, when affirmed by
diligence made the presumption conclusive decision is AFFIRMED. There is no
the Court of Appeals, are binding on this Court.
against her. pronouncement as to costs.
The Case 3
SO ORDERED.

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The Facts 5. Laydays/Cancelling: July 26, Under paragraph 10 thereof, it is
1974/Aug. 5, 1974. provided that "(o)wners shall, before and
The MV Vlasons I is a vessel which renders at the beginning of the voyage, exercise
tramping service and, as such, does not 6. Loading/Discharging Rate: 750 tons due diligence to make the vessel
transport cargo or shipment for the general per WWDSHINC. (Weather Working seaworthy and properly manned,
public. Its services are available only to specific Day of 24 consecutive hours, Sundays equipped and supplied and to make the
persons who enter into a special contract of and Holidays Included). holds and all other parts of the vessel in
charter party with its owner. It is undisputed that which cargo is carried, fit and safe for its
the ship is a private carrier. And it is in the reception, carriage and preservation.
7. Demurrage/Dispatch:
capacity that its owner, Vlasons Shipping, Inc., Owners shall not be liable for loss of or
P8,000.00/P4,000.00 per day.
entered into a contract of affreightment or damage of the cargo arising or resulting
contract of voyage charter hire with National from: unseaworthiness unless caused by
8. . . . want of due diligence on the part of the
Steel Corporation.
owners to make the vessel seaworthy,
9. Cargo Insurance: Charterer's and/or and to secure that the vessel is properly
The facts as found by Respondent Court of
Shipper's must insure the cargoes. manned, equipped and supplied and to
Appeals are as follows: Shipowners not responsible for make the holds and all other parts of the
losses/damages except on proven willful vessel in which cargo is carried, fit and
(1) On July 17, 1974, plaintiff National negligence of the officers of the vessel. safe for its reception, carriage and
Steel Corporation (NSC) as Charterer preservation; . . . ; perils, dangers and
and defendant Vlasons Shipping, Inc. accidents of the sea or other navigable
10. Other terms: (a) All terms/conditions
(VSI) as Owner, entered into a Contract of NONYAZAI C/P [sic] or other waters; . . . ; wastage in bulk or weight
of Voyage Charter Hire (Exhibit "B"; also internationally recognized Charter Party or any other loss or damage arising from
Exhibit "1") whereby NSC hired VSI's inherent defect, quality or vice of the
Agreement shall form part of this
vessel, the MV "VLASONS I" to make cargo; insufficiency of packing; . . . ;
Contract.
one (1) voyage to load steel products at latent defects not discoverable by due
Iligan City and discharge them at North diligence; any other cause arising
Harbor, Manila, under the following xxx xxx xxx
without the actual fault or privity of
terms and conditions, viz: Owners or without the fault of the agents
The terms "F.I.O.S.T." which is used in
or servants of owners."
1. . . . the shipping business is a standard
provision in the NANYOZAI Charter
Party which stands for "Freight In and Paragraph 12 of said NANYOZAI
2. Cargo: Full cargo of steel products of Out including Stevedoring and Trading", Charter Party also provides that
not less than 2,500 MT, 10% more or "(o)wners shall not be responsible for
which means that the handling, loading
less at Master's option. and unloading of the cargoes are the split, chafing and/or any damage unless
responsibility of the Charterer. Under caused by the negligence or default of
3. . . . Paragraph 5 of the NANYOZAI Charter the master and crew."
Party, it states, "Charterers to load, stow
4. Freight/Payment: P30.00/metric ton, and discharge the cargo free of risk and (2) On August 6, 7 and 8, 1974, in
FIOST basis. Payment upon expenses to owners. . . . (Emphasis accordance with the Contract of Voyage
presentation of Bill of Lading within supplied). Charter Hire, the MV "VLASONS I"
fifteen (15) days. loaded at plaintiffs pier at Iligan City, the

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NSC's shipment of 1,677 skids of packages of hot rolled sheets and metal and crew in the management of the
tinplates and 92 packages of hot rolled covers of the tinplates; that tarpaulin vessel as well as the want of due
sheets or a total of 1,769 packages with hatch covers were noted torn at various diligence on the part of the defendant to
a total weight of about 2,481.19 metric extents; that container/metal casings of make the vessel seaworthy and to make
tons for carriage to Manila. The the skids were rusting all over. MASCO the holds and all other parts of the
shipment was placed in the three (3) ventured the opinion that "rusting of the vessel in which the cargo was carried, fit
hatches of the ship. Chief Mate Gonzalo tinplates was caused by contact with and safe for its reception, carriage and
Sabando, acting as agent of the vessel[,] SEA WATER sustained while still on preservation — all in violation of
acknowledged receipt of the cargo on board the vessel as a consequence of defendant's undertaking under their
board and signed the corresponding bill the heavy weather and rough seas Contract of Voyage Charter Hire.
of lading, B.L.P.P. No. 0233 (Exhibit "D") encountered while en route to
on August 8, 1974. destination (Exhibit "F"). It was also (7) In its answer, defendant denied
reported that MASCO's surveyors drew liability for the alleged damage claiming
(3) The vessel arrived with the cargo at at random samples of bad order packing that the MV "VLASONS I" was
Pier 12, North Harbor, Manila, on August materials of the tinplates and delivered seaworthy in all respects for the carriage
12, 1974. The following day, August 13, the same to the M.I.T. Testing of plaintiff's cargo; that said vessel was
1974, when the vessel's three (3) Laboratories for analysis. On August 31, not a "common carrier" inasmuch as she
hatches containing the shipment were 1974, the M.I.T. Testing Laboratories was under voyage charter contract with
opened by plaintiff's agents, nearly all issued Report No. 1770 (Exhibit "I") the plaintiff as charterer under the
the skids of tinplates and hot rolled which in part, states, "The analysis of charter party; that in the course of the
sheets were allegedly found to be wet bad order samples of packing materials . voyage from Iligan City to Manila, the
and rusty. The cargo was discharged . . shows that wetting was caused by MV "VLASONS I" encountered very
and unloaded by stevedores hired by the contact with SEA WATER". rough seas, strong winds and adverse
Charterer. Unloading was completed weather condition, causing strong winds
only on August 24, 1974 after incurring a (5) On September 6, 1974, on the basis and big waves to continuously pound
delay of eleven (11) days due to the of the aforesaid Report No. 1770, against the vessel and seawater to
heavy rain which interrupted the plaintiff filed with the defendant its claim overflow on its deck and hatch covers,
unloading operations. (Exhibit "E") for damages suffered due to the that under the Contract of Voyage
downgrading of the damaged tinplates in Charter Hire, defendant shall not be
(4) To determine the nature and extent the amount of P941,145.18. Then on responsible for losses/damages except
of the wetting and rusting, NSC called October 3, 1974, plaintiff formally on proven willful negligence of the
for a survey of the shipment by the demanded payment of said claim but officers of the vessel, that the officers of
Manila Adjusters and Surveyors defendant VSI refused and failed to pay. said MV "VLASONS I" exercised due
Company (MASCO). In a letter to the Plaintiff filed its complaint against diligence and proper seamanship and
NSC dated March 17, 1975 (Exhibit defendant on April 21, 1976 which was were not willfully negligent; that
"G"), MASCO made a report of its ocular docketed as Civil Case No. 23317, CFI, furthermore the Voyage Charter Party
inspection conducted on the cargo, both Rizal. provides that loading and discharging of
while it was still on board the vessel and the cargo was on FIOST terms which
later at the NDC warehouse in Pureza (6) In its complaint, plaintiff claimed that means that the vessel was free of risk
St., Sta. Mesa, Manila where the cargo it sustained losses in the aforesaid and expense in connection with the
was taken and stored. MASCO reported amount of P941,145.18 as a result of the loading and discharging of the cargo;
that it found wetting and rusting of the act, neglect and default of the master that the damage, if any, was due to the

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Cases
inherent defect, quality or vice of the (b) That under their (b) That for purposes of
cargo or to the insufficient packing Voyage Charter Hire the voyage covered by
thereof or to latent defect of the cargo Contract, plaintiff had the Contract of Voyage
not discoverable by due diligence or to agreed to pay defendant Charter Hire (Exh. "1"),
any other cause arising without the the sum of P8,000.00 the MV VLASONS I"
actual fault or privity of defendant and per day for demurrage. was covered by the
without the fault of the agents or The vessel was on required seaworthiness
servants of defendant; consequently, demurrage for eleven certificates including the
defendant is not liable; that the (11) days in Manila Certification of
stevedores of plaintiff who discharged waiting for plaintiff to Classification issued by
the cargo in Manila were negligent and discharge its cargo from an international
did not exercise due care in the the vessel. Thus, classification society,
discharge of the cargo; land that the plaintiff was liable to pay the NIPPON KAIJI
cargo was exposed to rain and seawater defendant demurrage in KYOKAI (Exh. "4");
spray while on the pier or in transit from the total amount of Coastwise License from
the pier to plaintiff's warehouse after P88,000.00. the Board of
discharge from the vessel; and that Transportation (Exh.
plaintiff's claim was highly speculative (c) For filing a clearly "5"); International
and grossly exaggerated and that the unfounded civil action Loadline Certificate from
small stain marks or sweat marks on the against defendant, the Philippine Coast
edges of the tinplates were magnified plaintiff should be Guard (Exh. "6"); Cargo
and considered total loss of the cargo. ordered to pay Ship Safety Equipment
Finally, defendant claimed that it had defendant attorney's Certificate also from the
complied with all its duties and fees and all expenses of Philippine Coast Guard
obligations under the Voyage Charter litigation in the amount (Exh. "7"); Ship Radio
Hire Contract and had no responsibility of not less than Station License (Exh.
whatsoever to plaintiff. In turn, it alleged P100,000.00. "8"); Certificate of
the following counterclaim: Inspection by the
Philippine Coast Guard
(8) From the evidence presented by both
(a) That despite the full parties, the trial court came out with the (Exh. "12"); and
and proper performance following findings which were set forth in Certificate of Approval
by defendant of its for Conversion issued
its decision:
obligations under the by the Bureau of
Voyage Charter Hire Customs (Exh. "9").
(a) The MV "VLASONS That being a vessel
Contract, plaintiff failed I" is a vessel of
and refused to pay the engaged in both
Philippine registry overseas and coastwise
agreed charter hire of
engaged in the tramping trade, the MV
P75,000.00 despite
service and is available "VLASONS I" has a
demands made by
for hire only under higher degree of
defendant; special contracts of seaworthiness and
charter party as in this safety.
particular case.

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CREDIT TRANSACTIONS – II. COMMON CARRIERS IN GENERAL (A. Civil Code definition of a common carrier; Tests)
Cases
(c) Before it proceeded supported by evidence. claimed by plaintiff that
to Iligan City to perform The provisions of the the tinplates themselves
the voyage called for by Civil Code on common were wrapped in kraft
the Contract of Voyage carriers pursuant to paper lining and
Charter Hire, the MV which there exists a corrugated cardboards
"VLASONS I" presumption of could not be affected by
underwent drydocking in negligence in case of water from outside.
Cebu and was loss or damage to the
thoroughly inspected by cargo are not (f) The stevedores hired
the Philippine Coast applicable. As to the by the plaintiff to
Guard. In fact, subject damage to the tinplates discharge the cargo of
voyage was the vessel's which was allegedly due tinplates were negligent
first voyage after the to the wetting and in not closing the hatch
drydocking. The rusting thereof, there is openings of the MV
evidence shows that the unrebutted testimony of "VLASONS I" when
MV "VLASONS I" was witness Vicente rains occurred during
seaworthy and properly Angliongto that tinplates the discharging of the
manned, equipped and "sweat" by themselves cargo thus allowing
supplied when it when packed even rainwater to enter the
undertook the voyage. It without being in contract hatches. It was proven
has all the required (sic) with water from that the stevedores
certificates of outside especially when merely set up temporary
seaworthiness. the weather is bad or tents to cover the hatch
raining. The trust openings in case of rain
(d) The cargo/shipment caused by sweat or so that it would be easy
was securely stowed in moisture on the for them to resume work
three (3) hatches of the tinplates may be when the rains stopped
ship. The hatch considered as a loss or by just removing the
openings were covered damage but then, tent or canvas. Because
by hatchboards which defendant cannot be of this improper
were in turn covered by held liable for it covering of the hatches
two or double pursuant to Article 1734 by the stevedores
tarpaulins. The hatch of the Civil Case which during the discharging
covers were water tight. exempts the carrier from and unloading
Furthermore, under the responsibility for loss or operations which were
hatchboards were steel damage arising from the interrupted by rains,
beams to give support. "character of the goods . rainwater drifted into the
. ." All the 1,769 skids of cargo through the hatch
the tinplates could not openings. Pursuant to
(e) The claim of the
have been damaged by paragraph 5 of the
plaintiff that defendant
violated the contract of water as claimed by NANYOSAI [sic] Charter
carriage is not plaintiff. It was shown as Party which was

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CREDIT TRANSACTIONS – II. COMMON CARRIERS IN GENERAL (A. Civil Code definition of a common carrier; Tests)
Cases
expressly made part of plaintiff complied with pay demurrage of
the Contract of Voyage the requirement, then it P8,000.00 per day of
Charter Hire, the could have recovered its delay in the unloading of
loading, stowing and loss or damage from the the cargoes. The delay
discharging of the cargo insurer. Plaintiff also amounted to eleven (11)
is the sole responsibility violated the charter days thereby making
of the plaintiff charterer party contract when it plaintiff liable to pay
and defendant carrier loaded not only "steel defendant for
has no liability for products", i.e. steel demurrage in the
whatever damage may bars, angular bars and amount of P88,000.00.
occur or maybe [sic] the like but also
caused to the cargo in tinplates and hot rolled Appealing the RTC decision to the Court of
the process. sheets which are high Appeals, NSC alleged six errors:
grade cargo
(g) It was also commanding a higher
I
established that the freight. Thus plaintiff
vessel encountered was able to ship grade
cargo at a lower freight The trial court erred in finding that the
rough seas and bad
rate. MV "VLASONS I" was seaworthy,
weather while en route
properly manned, equipped and
from Iligan City to
supplied, and that there is no proof of
Manila causing sea (i) As regards
willful negligence of the vessel's officers.
water to splash on the defendant's
ship's deck on account counterclaim, the
of which the master of contract of voyage II
the vessel (Mr. Antonio charter hire under
C. Dumlao) filed a Paragraph 4 thereof, The trial court erred in finding that the
"Marine Protest" on fixed the freight at rusting of NSC's tinplates was due to the
August 13, 1974 (Exh. P30.00 per metric ton inherent nature or character of the
"15"); which can be payable to defendant goods and not due to contact with
invoked by defendant as carrier upon seawater.
a force majeure that presentation of the bill
would exempt the of lading within fifteen III
defendant from liability. (15) days. Plaintiff has
not paid the total freight The trial court erred in finding that the
(h) Plaintiff did not due of P75,000.00 stevedores hired by NSC were negligent
comply with the despite demands. The in the unloading of NSC's shipment.
requirement prescribed evidence also showed
in paragraph 9 of the that the plaintiff was
IV
Voyage Charter Hire required and bound
contract that it was to under paragraph 7 of
insure the cargo the same Voyage
because it did not. Had Charter Hire contract to

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CREDIT TRANSACTIONS – II. COMMON CARRIERS IN GENERAL (A. Civil Code definition of a common carrier; Tests)
Cases
The trial court erred in exempting VSI 2. Whether or not the alleged award of P100,000 for attorney's fees
from liability on the ground of force "seaworthiness certificates" (Exhibits and expenses of litigation.
majeure. "3", "4", "5", "6", "7", "8", "9", "11" and
"12") were admissible in evidence and Amplifying the foregoing, VSI raises the
V constituted evidence of the vessel's following issues in its memorandum:
10

seaworthiness at the beginning of the


The trial court erred in finding that NSC voyages; and I. Whether or not the provisions of the
violated the contract of voyage charter Civil Code of the Philippines on common
hire. 3. Whether or not a charterer's failure to carriers pursuant to which there exist[s]
insure its cargo exempts the shipowner a presumption of negligence against the
from liability for cargo damage. common carrier in case of loss or
VI
damage to the cargo are applicable to a
The trial court erred in ordering NSC to Questions of Fact private carrier.
pay freight, demurrage and attorney's
fees, to VSI.
4 1. Whether or not the vessel was II. Whether or not the terms and
seaworthy and cargo-worthy; conditions of the Contract of Voyage
Charter Hire, including the Nanyozai
As earlier stated, the Court of Appeals modified
2. Whether or not vessel's officers and Charter, are valid and binding on both
the decision of the trial court by reducing the
demurrage from P88,000.00 to P44,000.00 and crew were negligent in handling and contracting parties.
deleting the award of attorneys fees and caring for NSC's cargo;
expenses of litigation. NSC and VSI filed The foregoing issues raised by the parties will be
separate motions for reconsideration. In a 3. Whether or not NSC's cargo of discussed under the following headings:
5
Resolution dated October 20, 1993, the tinplates did sweat during the voyage
appellate court denied both motions. Undaunted, and, hence, rusted on their own; and 1. Questions of Fact
NSC and VSI filed their respective petitions for
review before this Court. On motion of VSI, the 4. Whether or not NSC's stevedores 2. Effect of NSC's Failure to Insure the Cargo
Court ordered on February 14, 1994 the were negligent and caused the
6
consolidation of these petitions. wetting[/]rusting of NSC's tinplates. 3. Admissibility of Certificates Proving
Seaworthiness
The Issues 9
In its separate petition, VSI submits for the
consideration of this Court the following alleged 4. Demurrage and Attorney's Fees.
7 8
In its petition and memorandum, NSC raises errors of the CA:
the following questions of law and fact:
The Court's Ruling
A. The respondent Court of Appeals
Questions of Law committed an error of law in reducing The Court affirms the assailed Decision of the
the award of demurrage from
Court of Appeals, except in respect of the
1. Whether or not a charterer of a vessel P88,000.00 to P44,000.00.
demurrage.
is liable for demurrage due to cargo
unloading delays caused by weather B. The respondent Court of Appeals Preliminary Matter: Common Carrier or Private
interruption; committed an error of law in deleting the
Carrier?

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Cases
At the outset, it is essential to establish whether Industrial Supply, Inc., vs. Court of Appeals and also provided that "[o]wners shall not be
16
VSI contracted with NSC as a common carrier or Seven Brothers Shipping Corporation, the responsible for split, chafing and/or any damage
as a private carrier. The resolution of this Court ruled: unless caused by the negligence or default of
19
preliminary question determines the law, the master or crew."
standard of diligence and burden of proof . . . in a contract of private carriage, the
applicable to the present case. parties may freely stipulate their duties Burden of Proof
and obligations which perforce would be
Article 1732 of the Civil Code defines a common binding on them. Unlike in a contract In view of the aforementioned contractual
carrier as "persons, corporations, firms or involving a common carrier, private stipulations, NSC must prove that the damage to
associations engaged in the business of carrying carriage does not involve the general its shipment was caused by VSI's willful
or transporting passengers or goods or both, by public. Hence, the stringent provisions of negligence or failure to exercise due diligence in
land, water, or air, for compensation, offering the Civil Code on common carriers making MV Vlasons I seaworthy and fit for
their services to the public." It has been held that protecting the general public cannot holding, carrying and safekeeping the cargo.
the true test of a common carrier is the carriage justifiably be applied to a ship Ineluctably, the burden of proof was placed on
of passengers or goods, provided it has space, transporting commercial goods as a NSC by the parties' agreement.
for all who opt to avail themselves of its private carrier. Consequently, the public
11
transportation service for a fee. A carrier which policy embodied therein is not
This view finds further support in the Code of
does not qualify under the above test is deemed contravened by stipulations in a charter
Commerce which pertinently provides:
a private carrier. "Generally, private carriage is party that lessen or remove the
undertaken by special agreement and the carrier protection given by law in contracts
does not hold himself out to carry goods for the involving common carriers.
17 Art. 361. Merchandise shall be
general public. The most typical, although not transported at the risk and venture of the
the only form of private carriage, is the charter shipper, if the contrary has not been
Extent of VSI's Responsibility and
party, a maritime contract by which the expressly stipulated.
Liability Over NSC's Cargo
charterer, a party other than the shipowner,
obtains the use and service of all or some part of Therefore, the damage and impairment
It is clear from the parties' Contract of Voyage
a ship for a period of time or a voyage or suffered by the goods during the
12 Charter Hire, dated July 17, 1974, that VSI "shall
voyages." transportation, due to fortuitous
not be responsible for losses except on proven
event, force majeure, or the nature and
willful negligence of the officers of the vessel."
In the instant case, it is undisputed that VSI did inherent defect of the things, shall be for
The NANYOZAI Charter Party, which was
not offer its services to the general public. As the account and risk of the shipper.
incorporated in the parties' contract of
found by the Regional Trial Court, it carried transportation further provided that the
passengers or goods only for those it chose shipowner shall not be liable for loss of or a The burden of proof of these accidents
13
under a "special contract of charter party." As damage to the cargo arising or resulting from is on the carrier.
correctly concluded by the Court of Appeals, unseaworthiness, unless the same was caused
the MV Vlasons I "was not a common but a by its lack of due diligence to make the vessel Art. 362. The carrier, however, shall be
14
private carrier." Consequently, the rights and seaworthy or to ensure that the same was liable for damages arising from the
obligations of VSI and NSC, including their "properly manned, equipped and supplied," and cause mentioned in the preceding article
respective liability for damage to the cargo, are to "make the holds and all other parts of the if proofs against him show that they
determined primarily by stipulations in their vessel in which cargo [was] carried, fit and safe occurred on account of his negligence or
contract of private carriage or charter for its reception, carriage and his omission to take the precautions
15
party. Recently, in Valenzuela Hardwood and 18
preservation." The NANYOZAI Charter Party usually adopted by careful persons,

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unless the shipper committed fraud in forward with the information available to had the burden of
21
the bill of lading, making him to believe it, and its failure to do so warrants an proof."
that the goods were of a class or quality inference or presumption of its liability.
different from what they really were. However, such inferences and First Issue: Questions of Fact
presumptions, while they may affect the
Because the MV Vlasons I was a private carrier, burden of coming forward with evidence,
Based on the foregoing, the determination of the
the shipowner's obligations are governed by the do not alter the burden of proof which following factual questions is manifestly relevant:
foregoing provisions of the Code of Commerce remains on plaintiff, and, where the (1) whether VSI exercised due diligence in
and not by the Civil Code which, as a general carrier comes forward with evidence
making MV Vlasons I seaworthy for the intended
rule, places the prima faciepresumption of explaining the loss or damage, the
purpose under the charter party; (2) whether the
negligence on a common carrier. It is a burden of going forward with the
damage to the cargo should be attributed to the
hornbook doctrine that: evidence is again on plaintiff. willful negligence of the officers and crew of the
vessel or of the stevedores hired by NSC; and
In an action against a private carrier for Where the action is based on the (3) whether the rusting of the tinplates was
loss of, or injury to, cargo, the burden is shipowner's warranty of seaworthiness, caused by its own "sweat" or by contact with
on the plaintiff to prove that the carrier the burden of proving a breach thereof seawater.
was negligent or unseaworthy, and the and that such breach was the proximate
fact that the goods were lost or cause of the damage rests on plaintiff,
These questions of fact were threshed out and
damaged while in the carrier's custody and proof that the goods were lost or
decided by the trial court, which had the
does not put the burden of proof on the damaged while in the carrier's
firsthand opportunity to hear the parties'
carrier. possession does not cast on it the
conflicting claims and to carefully weigh their
burden of proving seaworthiness. . . .
respective evidence. The findings of the trial
Since . . . a private carrier is not an Where the contract of carriage exempts court were subsequently affirmed by the Court of
insurer but undertakes only to exercise the carrier from liability for Appeals. Where the factual findings of both the
unseaworthiness not discoverable by
due care in the protection of the goods trial court and the Court of Appeals coincide, the
due diligence, the carrier has the 22
committed to its care, the burden of same are binding on this Court. We stress that,
preliminary burden of proving the 23
proving negligence or a breach of that subject to some exceptional instances, only
exercise of due diligence to make the
duty rests on plaintiff and proof of loss 20 questions of law — not questions of fact — may
of, or damage to, cargo while in the vessel seaworthy. be raised before this Court in a petition for
carrier's possession does not cast on it review under Rule 45 of the Rules of Court. After
the burden of proving proper care and In the instant case, the Court of Appeals a thorough review of the case at bar, we find no
diligence on its part or that the loss correctly found the NSC "has not taken the reason to disturb the lower court's factual
occurred from an excepted cause in the correct position in relation to the question of who findings, as indeed NSC has not successfully
contract or bill of lading. However, in has the burden of proof. Thus, in its brief (pp. proven the application of any of the aforecited
discharging the burden of proof, plaintiff 10-11), after citing Clause 10 and Clause 12 of exceptions.
is entitled to the benefit of the the NANYOZAI Charter Party (incidentally
presumptions and inferences by which plaintiff-appellant's [NSC's] interpretation of
Was MV Vlasons I Seaworthy?
the law aids the bailor in an action Clause 12 is not even correct), it argues that 'a
against a bailee, and since the carrier is careful examination of the evidence will show
that VSI miserably failed to comply with any of In any event, the records reveal that VSI
in a better position to know the cause of
these obligation's as if defendant-appellee [VSI] exercised due diligence to make the ship
the loss and that it was not one involving
seaworthy and fit for the carriage of NSC's cargo
its liability, the law requires that it come

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28
of steel and tinplates. This is shown by the fact clear from the marine protest of the master of xxx xxx xxx
that it was drylocked and inspected by the the MV Vlasons I, Antonio C. Dumlao, and the
Philippine Coast Guard before it proceeded to deposition of the ship's boatswain, Jose Pascua. And the relevant portions of Jose Pascua's
Iligan City for its voyage to Manila under the The salient portions of said marine protest read: deposition are as follows:
24
contract of voyage charter hire. The vessel's
voyage from Iligan to Manila was the . . . That the M/V "VLASONS I" departed q What is the purpose of the canvas cover?
vessel's first voyage after drydocking. The Iligan City or about 0730 hours of
Philippine Coast Guard Station in Cebu cleared August 8, 1974, loaded with
it as seaworthy, fitted and equipped; it met all a So that the cargo would not be soaked with
approximately 2,487.9 tons of steel
25
requirements for trading as cargo vessel. The water.
plates and tin plates consigned to
Court of Appeals itself sustained the conclusion National Steel Corporation; that before
of the trial court that MV Vlasons I was departure, the vessel was rigged, fully q And will you describe how the canvas cover
seaworthy. We find no reason to modify or equipped and cleared by the authorities; was secured on the hatch opening?
reverse this finding of both the trial and the that on or about August 9, 1974, while in
appellate courts. the vicinity of the western part of Negros WITNESS
and Panay, we encountered very rough
Who Were Negligent: seas and strong winds and Manila office a It was placed flat on top of the hatch cover,
Seamen or Stevedores? was advised by telegram of the adverse with a little canvas flowing over the sides and we
weather conditions encountered; that in place[d] a flat bar over the canvas on the side of
As noted earlier, the NSC had the burden of the morning of August 10, 1974, the the hatches and then we place[d] a stopper so
proving that the damage to the cargo was weather condition changed to worse and that the canvas could not be removed.
caused by the negligence of the officers and the strong winds and big waves continued
crew of MV Vlasons I in making their vessel pounding the vessel at her port side ATTY DEL ROSARIO
seaworthy and fit for the carriage of tinplates. causing sea water to overflow on deck
NSC failed to discharge this burden. andhatch (sic) covers and which caused
q And will you tell us the size of the hatch
the first layer of the canvass covering to
opening? The length and the width of the hatch
give way while the new canvass
Before us, NSC relies heavily on its claim opening.
that MV Vlasons I had used an old and torn covering still holding on;
tarpaulin or canvas to cover the hatches through a Forty-five feet by thirty-five feet, sir.
which the cargo was loaded into the cargo hold That the weather condition improved
of the ship. It faults the Court of Appeals for when we reached Dumali Point
protected by Mindoro; that we re- xxx xxx xxx
failing to consider such claim as an
26
"uncontroverted fact" and denies that MV secured the canvass covering back to
Vlasons I "was equipped with new canvas position; that in the afternoon of August q How was the canvas supported in the middle
covers in tandem with the old ones as indicated 10, 1974, while entering Maricaban of the hatch opening?
27
in the Marine Protest . . ." We disagree. Passage, we were again exposed to
moderate seas and heavy rains; that a There is a hatch board.
while approaching Fortune Island, we
The records sufficiently support VSI's contention
that the ship used the old tarpaulin, only in encountered again rough seas, strong ATTY DEL ROSARIO
addition to the new one used primarily to make winds and big waves which caused the
same canvass to give way and leaving
the ship's hatches watertight. The foregoing are q What is the hatch board made of?
the new canvass holding on;

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a It is made of wood, with a handle. q How tight? ship. Vicente Angliongto, an officer of VSI,
testified thus:
q And aside from the hatch board, is there any a Very tight, sir.
other material there to cover the hatch? ATTY ZAMORA:
q Now, on top of the hatch boards, according to
a There is a beam supporting the hatch board. you, is the canvass cover. How many canvas Q Now, during your
covers? testimony on November
q What is this beam made of? 5, 1979, you stated on
a Two, sir.
29 August 14 you went on
board the vessel upon
a It is made of steel, sir.
notice from the National
That due diligence was exercised by the officers
Steel Corporation in
q Is the beam that was placed in the hatch and the crew of the MV Vlasons I was further
order to conduct the
opening covering the whole hatch opening? demonstrated by the fact that, despite
inspection of the cargo.
encountering rough weather twice, the new
During the course of the
tarpaulin did not give way and the ship's hatches
a No, sir. investigation, did you
and cargo holds remained waterproof. As aptly
stated by the Court of Appeals, ". . . we find no chance to see the
q How many hatch beams were there placed reason not to sustain the conclusion of the lower discharging operation?
across the opening? court based on overwhelming evidence, that
the MV 'VLASONS I' was seaworthy when it WITNESS:
a There are five beams in one hatch opening. undertook the voyage on August 8, 1974
carrying on board thereof plaintiff-appellant's A Yes, sir, upon my
ATTY DEL ROSARIO shipment of 1,677 skids of tinplates and 92 arrival at the vessel, I
packages of hot rolled sheets or a total of 1,769 saw some of the
q And on top of the beams you said there is a packages from NSC's pier in Iligan City arriving tinplates already
hatch board. How many pieces of wood are put safely at North Harbor, Port Area, Manila, on discharged on the pier
30
on top? August 12, 1974; . . . but majority of the
tinplates were inside the
Indeed, NSC failed to discharge its burden to hall, all the hatches
a Plenty, sir, because there are several pieces
show negligence on the part of the officers and were opened.
on top of the hatch beam.
the crew of MV Vlasons I. On the contrary, the
records reveal that it was the stevedores of NSC Q In connection with
q And is there a space between the hatch
who were negligent in unloading the cargo from these cargoes which
boards?
the ship. were unloaded, where is
the place.
a There is none, sir.
The stevedores employed only a tent-like
material to cover the hatches when strong rains A At the Pier.
q They are tight together? occasioned by a passing typhoon disrupted the
unloading of the cargo. This tent-like covering, Q What was used to
a Yes, sir. however, was clearly inadequate for keeping protect the same from
rain and seawater away from the hatches of the weather?

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ATTY LOPEZ: constructed at the Q In the course of your
opening of the hatches inspection,
We object, your Honor, to protect the cargo Mr. Anglingto [sic], did
this question was from the rain. Now, will you see in fact the water
already asked. This you describe [to] the enter and soak into the
particular matter . . . the Court the tents canvass and tinplates.
transcript of constructed.
stenographic notes A Yes, sir, the second
shows the same was A The tents are just a time I went there, I saw
covered in the direct base of canvas which it.
examination. look like a tent of an
Indian camp raise[d] Q As owner of the
ATTY ZAMORA: high at the middle with vessel, did you not
the whole side advise the National
separated down to the Steel Corporation [of]
Precisely, your Honor,
hatch, the size of the the procedure adopted
we would like to go on
hatch and it is soaks by its stevedores in
detail, this is the serious
[sic] at the middle discharging the cargo
part of the testimony.
because of those particularly in this tent
weather and this can be covering of the
COURT: used only to temporarily hatches?
protect the cargo from
All right, witness may getting wet by rains. A Yes, sir, I did the first
answer.
time I saw it, I called the
Q Now, is this attention of the
ATTY LOPEZ: procedure adopted by stevedores but the
the stevedores of stevedores did not mind
Q What was used in covering tents proper? at all, so, called the
order to protect the attention of the
cargo from the weather? A No, sir, at the time representative of the
they were discharging National Steel but
A A base of canvas was the cargo, there was a nothing was done, just
used as cover on top of typhoon passing by and the same. Finally, I
31
the tin plates, and tents the hatch tent was not wrote a letter to them.
were built at the good enough to hold all
opening of the hatches. of it to prevent the water NSC attempts to discredit the testimony of
soaking through the Angliongto by questioning his failure to complain
Q You also stated that canvass and enter the immediately about the stevedores' negligence on
the hatches were cargo. the first day of unloading, pointing out that he
already opened and that wrote his letter to petitioner only seven days
32
there were tents later. The Court is not persuaded. Angliongto's

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candid answer in his aforequoted testimony rains stopped by just removing said The trial court relied on the testimony of Vicente
satisfactorily explained the delay. Seven days tents or canvass. It has also been shown Angliongto in finding that ". . . tinplates 'sweat' by
lapsed because he first called the attention of that on August 20, 1974, VSI President themselves when packed even without being in
the stevedores, then the NSC's representative, Vicente Angliongto wrote [NSC] calling contact with water from outside especially when
about the negligent and defective procedure attention to the manner the stevedores the weather is bad or
35
adopted in unloading the cargo. This series of hired by [NSC] were discharging the raining . . ." The Court of Appeals affirmed the
actions constitutes a reasonable response in cargo on rainy days and the improper trial court's finding.
accord with common sense and ordinary human closing of the hatches which allowed
experience. Vicente Angliongto could not be continuous heavy rain water to leak A discussion of this issue appears
blamed for calling the stevedores' attention first through and drip to the tinplates' covers inconsequential and unnecessary. As previously
and then the NSC's representative on location and [Vicente Angliongto] also suggesting discussed, the damage to the tinplates was
before formally informing NSC of the negligence that due to four (4) days continuos rains occasioned not by airborne moisture but by
he had observed, because he was not with strong winds that the hatches be contact with rain and seawater which the
responsible for the stevedores or the unloading totally closed down and covered with stevedores negligently allowed to seep in during
operations. In fact, he was merely expressing canvas and the hatch tents lowered. the unloading.
concern for NSC which was ultimately (Exh. "13"). This letter was received by
responsible for the stevedores it had hired and [NSC] on 22 August 1974 while
Second Issue: Effect of NSC's Failure to
the performance of their task to unload the discharging operations were still going
33 Insure the Cargo
cargo. on (Exhibit "13-A").
The obligation of NSC to insure the cargo
We see no reason to reverse the trial and the The fact that NSC actually accepted and
stipulated in the Contract of Voyage Charter Hire
appellate courts' findings and conclusions on this proceeded to remove the cargo from the ship
is totally separate and distinct from the
point, viz: during unfavorable weather will not make VSI contractual or statutory responsibility that may
liable for any damage caused thereby. In be incurred by VSI for damage to the cargo
In the THIRD assigned error, [NSC] passing, it may be noted that the NSC may seek
caused by the willful negligence of the officers
claims that the trial court erred in finding indemnification, subject to the laws on
and the crew of MV Vlasons I. Clearly, therefore,
that the stevedores hired by NSC were prescription, from the stevedoring company at
NSC's failure to insure the cargo will not affect
negligent in the unloading of NSC's fault in the discharge operations. "A stevedore
its right, as owner and real party in interest, to
shipment. We do not think so. Such company engaged in discharging cargo . . . has
file an action against VSI for damages caused
negligence according to the trial court is the duty to load the cargo . . . in a prudent
by the latter's willful negligence. We do not find
evident in the stevedores hired by manner, and it is liable for injury to, or loss of,
anything in the charter party that would make the
[NSC], not closing the hatch of MV cargo caused by its negligence . . . and where
liability of VSI for damage to the cargo
'VLASONS I' when rains occurred during the officers and members and crew of the vessel
contingent on or affected in any manner by
the discharging of the cargo thus do nothing and have no responsibility in the
NSC's obtaining an insurance over the cargo.
allowing rain water and seawater spray discharge of cargo by stevedores . . . the vessel
to enter the hatches and to drift to and is not liable for loss of, or damage to, the cargo
caused by the negligence of the Third Issue: Admissibility of Certificates
fall on the cargo. It was proven that the 34
stevedores . . ." as in the instant case. Proving Seaworthiness
stevedores merely set up temporary
tents or canvas to cover the hatch
openings when it rained during the Do Tinplates "Sweat"? NSC's contention that MV Vlasons I was not
unloading operations so that it would be seaworthy is anchored on the alleged
easier for them to resume work after the inadmissibility of the certificates of

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seaworthiness offered in evidence by VSI. The We find, however, that Exhibit 11 is admissible xxx xxx xxx
said certificates include the following: under a well-settled exception to the hearsay
rule per Section 44 of Rule 130 of the Rules of 2. Cargo: Full cargo of steel products of
1. Certificate of Inspection of the Philippines Court, which provides that "(e)ntries in official not less than 2,500 MT, 10% more or
Coast Guard at Cebu records made in the performance of a duty by a less at Master's option.
public officer of the Philippines, or by a person in
2. Certificate of Inspection from the Philippine the performance of a duty specially enjoined by
xxx xxx xxx
law, are prima facie evidence of the facts therein
Coast Guard 38
stated." Exhibit 11 is an original certificate of
the Philippine Coast Guard in Cebu issued by 6. Loading/Discharging Rate: 750 tons
3. International Load Line Certificate from the Lieutenant Junior Grade Noli C. Flores to the per WWDSHINC.
Philippine Coast Guard effect that "the vessel 'VLASONS I' was
drydocked . . . and PCG Inspectors were sent on 7. Demurrage/Dispatch:
39
4. Coastwise License from the Board of board for inspection . . . After completion of P8,000.00/P4,000.00 per day.
Transportation drydocking and duly inspected by PCG
Inspectors, the vessel 'VLASONS I', a cargo The Court defined demurrage in its strict sense
5. Certificate of Approval for Conversion issued vessel, is in seaworthy condition, meets all as the compensation provided for in the contract
36
by the Bureau of Customs requirements, fitted and equipped for trading as of affreightment for the detention of the vessel
a cargo vessel was cleared by the Philippine beyond the laytime or that period of time agreed
40
NSC argues that the certificates are hearsay for Coast Guard and sailed for Cebu Port on July on for loading and unloading of cargo. It is
not having been presented in accordance with 10, 1974." (sic) NSC's claim, therefore, is given to compensate the shipowner for the
the Rules of Court. It points out that Exhibits 3, 4 obviously misleading and erroneous. nonuse of the vessel. On the other hand, the
and 11 allegedly are "not written records or acts following is well-settled:
of public officers"; while Exhibits 5, 6, 7, 8, 9, 11 At any rate, it should be stressed that NSC has
and 12 are not "evidenced by official publications the burden of proving that MV Vlasons I was not Laytime runs according to the particular
or certified true copies" as required by Sections seaworthy. As observed earlier, the vessel was clause of the charter party. . . . If laytime
37
25 and 26, Rule 132, of the Rules of Court. a private carrier and, as such, it did not have the is expressed in "running days," this
obligation of a common carrier to show that it means days when the ship would be run
After a careful examination of these exhibits, the was seaworthy. Indeed, NSC glaringly failed to continuously, and holidays are not
Court rules that Exhibits 3, 4, 5, 6, 7, 8, 9 and 12 discharge its duty of proving the willful excepted. A qualification of "weather
are inadmissible, for they have not been properly negligence of VSI in making the ship seaworthy permitting" excepts only those days
offered as evidence. Exhibits 3 and 4 are resulting in damage to its cargo. Assailing the when bad weather reasonably prevents
41
certificates issued by private parties, but they genuineness of the certificate of seaworthiness the work contemplated.
have not been proven by one who saw the is not sufficient proof that the vessel was not
writing executed, or by evidence of the seaworthy. In this case, the contract of voyage charter hire
genuineness of the handwriting of the maker, or provided for a four-day laytime; it also qualified
by a subscribing witness. Exhibits, 5, 6, 7, 8, 9, Fourth Issue: Demurrage and Attorney's Fees laytime as WWDSHINC or weather working days
42
and 12 are photocopies, but their admission Sundays and holidays included. The running of
under the best evidence rule have not been The contract of voyage charter hire laytime was thus made subject to the weather,
demonstrated. provides inter alia: and would cease to run in the event unfavorable
weather interfered with the unloading of
43
cargo. Consequently, NSC may not be held

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liable for demurrage as the four-day laytime to the cargo? Ranged against NSC are two demurrage awarded to VSI is deleted. No
allowed it did not lapse, having been tolled by formidable truths. First, both lower courts found pronouncement as to costs.
unfavorable weather condition in view of the that such damage was brought about during the
WWDSHINC qualification agreed upon by the unloading process when rain and seawater SO ORDERED.
parties. Clearly, it was error for the trial court and seeped through the cargo due to the fault or
the Court of Appeals to have found and affirmed negligence of the stevedores employed by it.
G.R. No. 125948 December 29, 1998
respectively that NSC incurred eleven days of Basic is the rule that factual findings of the trial
delay in unloading the cargo. The trial court court, when affirmed by the Court of Appeals,
arrived at this erroneous finding by subtracting are binding on the Supreme Court. Although FIRST PHILIPPINE INDUSTRIAL
from the twelve days, specifically August 13, there are settled exceptions, NSC has not CORPORATION, petitioner,
1974 to August 24, 1974, the only day of satisfactorily shown that this case is one of vs.
unloading unhampered by unfavorable weather them. Second, the agreement between the COURT OF APPEALS, HONORABLE
or rain, which was August 22, 1974. Based on parties — the Contract of Voyage Charter Hire PATERNO V. TAC-AN, BATANGAS CITY and
our previous discussion, such finding is a — placed the burden of proof for such loss or ADORACION C. ARELLANO, in her official
reversible error. As mentioned, the respondent damage upon the shipper, not upon the capacity as City Treasurer of Batangas,
appellate court also erred in ruling that NSC was shipowner. Such stipulation, while respondents.
liable to VSI for demurrage, even if it reduced disadvantageous to NSC, is valid because the
the amount by half. parties entered into a contract of private charter, MARTINEZ, J.:
not one of common carriage. Basic too is the
Attorney's Fees doctrine that courts cannot relieve a parry from This petition for review on certiorari assails
the effects of a private contract freely entered the Decision of the Court of Appeals dated
into, on the ground that it is allegedly one-sided November 29, 1995, in CA-G.R. SP No. 36801,
VSI assigns as error of law the Court of Appeals'
or unfair to the plaintiff. The charter party is a affirming the decision of the Regional Trial
deletion of the award of attorney's fees. We
normal commercial contract and its stipulations Court of Batangas City, Branch 84, in Civil
disagree. While VSI was compelled to litigate to
are agreed upon in consideration of many Case No. 4293, which dismissed petitioners'
protect its rights, such fact by itself will not justify
factors, not the least of which is the transport complaint for a business tax refund imposed
an award of attorney's fees under Article 2208 of
price which is determined not only by the actual by the City of Batangas.
the Civil Code when ". . . no sufficient showing of
costs but also by the risks and burdens assumed
bad faith would be reflected in a party's
by the shipper in regard to possible loss or Petitioner is a grantee of a pipeline
persistence in a case other than an erroneous
conviction of the righteousness of his cause . . damage to the cargo. In recognition of such concession under Republic Act No. 387, as
44
." Moreover, attorney's fees may not be factors, the parties even stipulated that the amended, to contract, install and operate oil
shipper should insure the cargo to protect itself pipelines. The original pipeline concession
awarded to a party for the reason alone that the
from the risks it undertook under the charter 1
was granted in 1967 and renewed by the
judgment rendered was favorable to the latter,
party. That NSC failed or neglected to protect Energy Regulatory Board in 1992.
2
as this is tantamount to imposing a premium on
itself with such insurance should not adversely
one's right to litigate or seek judicial redress of
45 affect VSI, which had nothing to do with such
legitimate grievances. Sometime in January 1995, petitioner applied
failure or neglect.
for a mayor's permit with the Office of the
Epilogue Mayor of Batangas City. However, before the
WHEREFORE, premises considered, the instant mayor's permit could be issued, the
consolidated petitions are hereby DENIED. The respondent City Treasurer required petitioner
At bottom, this appeal really hinges on a factual questioned Decision of the Court of Appeals is
issue: when, how and who caused the damage to pay a local tax based on its gross receipts
AFFIRMED with the MODIFICATION that the for the fiscal year 1993 pursuant to the Local

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3
Government Code . The respondent City contractors" under Section of preliminary injunction against
Treasurer assessed a business tax on the 143, Paragraph (e) of the respondents City of Batangas and Adoracion
petitioner amounting to P956,076.04 payable Local Government Code does Arellano in her capacity as City Treasurer. In
in four installments based on the gross not include the power to levy its complaint, petitioner alleged, inter alia,
receipts for products pumped at GPS-1 for on transportation contractors. that: (1) the imposition and collection of the
the fiscal year 1993 which amounted to business tax on its gross receipts violates
P181,681,151.00. In order not to hamper its The imposition and Section 133 of the Local Government Code;
operations, petitioner paid the tax under assessment cannot be (2) the authority of cities to impose and
protest in the amount of P239,019.01 for the categorized as a mere fee collect a tax on the gross receipts of
first quarter of 1993. authorized under Section 147 "contractors and independent contractors"
of the Local Government under Sec. 141 (e) and 151 does not include
On January 20, 1994, petitioner filed a letter- Code. The said section limits the authority to collect such taxes on
protest addressed to the respondent City the imposition of fees and transportation contractors for, as defined
Treasurer, the pertinent portion of which charges on business to such under Sec. 131 (h), the term "contractors"
reads: amounts as may be excludes transportation contractors; and, (3)
commensurate to the cost of the City Treasurer illegally and erroneously
regulation, inspection, and imposed and collected the said tax, thus
Please note that our Company
(FPIC) is a pipeline operator licensing. Hence, assuming meriting the immediate refund of the tax
7
with a government arguendo that FPIC is liable paid.
concession granted under the for the license fee, the
Petroleum Act. It is engaged imposition thereof based on Traversing the complaint, the respondents
in the business of gross receipts is violative of argued that petitioner cannot be exempt from
transporting petroleum the aforecited provision. The taxes under Section 133 (j) of the Local
products from the Batangas amount of P956,076.04 Government Code as said exemption applies
refineries, via pipeline, to (P239,019.01 per quarter) is only to "transportation contractors and
Sucat and JTF Pandacan not commensurate to the cost persons engaged in the transportation by
Terminals. As such, our of regulation, inspection and hire and common carriers by air, land and
Company is exempt from licensing. The fee is already a water." Respondents assert that pipelines
paying tax on gross receipts revenue raising measure, and are not included in the term "common
under Section 133 of the not a mere regulatory carrier" which refers solely to ordinary
4
Local Government Code of imposition. carriers such as trucks, trains, ships and the
1991 . . . . like. Respondents further posit that the term
On March 8, 1994, the respondent City "common carrier" under the said code
Treasurer denied the protest contending that pertains to the mode or manner by which a
Moreover, Transportation 8
contractors are not included petitioner cannot be considered engaged in product is delivered to its destination.
in the enumeration of transportation business, thus it cannot claim
contractors under Section exemption under Section 133 (j) of the Local On October 3, 1994, the trial court rendered a
5
131, Paragraph (h) of the Government Code. decision dismissing the complaint, ruling in
Local Government Code. this wise:
Therefore, the authority to On June 15, 1994, petitioner filed with the
impose tax "on contractors Regional Trial Court of Batangas City a
6
and other independent complaint for tax refund with prayer for writ

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. . . Plaintiff is either a 1. That the exemption granted under Sec. 133 petitioner is not a common carrier or a
contractor or other (j) encompasses only common carriers so as transportation contractor, and (2) the
independent contractor. not to overburden the riding public or exemption sought for by petitioner is not
commuters with taxes. Plaintiff is not a clear under the law.
. . . the exemption to tax common carrier, but a special carrier
claimed by the plaintiff has extending its services and facilities to a There is merit in the petition.
become unclear. It is a rule single specific or "special customer" under a
that tax exemptions are to be "special contract." A "common carrier" may be defined, broadly,
strictly construed against the as one who holds himself out to the public as
taxpayer, taxes being the 2. The Local Tax Code of 1992 was basically engaged in the business of transporting
lifeblood of the government. enacted to give more and effective local persons or property from place to place, for
Exemption may therefore be autonomy to local governments than the compensation, offering his services to the
granted only by clear and previous enactments, to mae them public generally.
unequivocal provisions of economically and financially viable to serve
law. the people and discharge their functions with
Art. 1732 of the Civil Code defines a
a concomitant obligation to accept certain
"common carrier" as "any person,
Plaintiff claims that it is a devolution of powers, . . . So, consistent with
corporation, firm or association engaged in
grantee of a pipeline this policy even franchise grantees are taxed
the business of carrying or transporting
concession under Republic (Sec. 137) and contractors are also taxed
9 passengers or goods or both, by land, water,
Act 387. (Exhibit A) whose under Sec. 143 (e) and 151 of the Code. or air, for compensation, offering their
concession was lately services to the public."
renewed by the Energy Petitioner assailed the aforesaid decision
Regulatory Board (Exhibit B). before this Court via a petition for review. On
The test for determining whether a party is a
Yet neither said law nor the February 27, 1995, we referred the case to
common carrier of goods is:
deed of concession grant any the respondent Court of Appeals for
10
tax exemption upon the consideration and adjudication. On
plaintiff. November 29, 1995, the respondent court 1. He must be engaged in the business of
11
rendered a decision affirming the trial carrying goods for others as a public
court's dismissal of petitioner's complaint. employment, and must hold himself out as
Even the Local Government
Petitioner's motion for reconsideration was ready to engage in the transportation of
Code imposes a tax on
denied on July 18, 1996.
12 goods for person generally as a business
franchise holders under Sec.
and not as a casual occupation;
137 of the Local Tax Code.
Such being the situation Hence, this petition. At first, the petition was
obtained in this case denied due course in a Resolution dated 2. He must undertake to carry goods of the
(exemption being unclear and
13
November 11, 1996. Petitioner moved for a kind to which his business is confined;
equivocal) resort to reconsideration which was granted by this
14
distinctions or other Court in a Resolution of January 22, 1997. 3. He must undertake to carry by the method
considerations may be of Thus, the petition was reinstated. by which his business is conducted and over
help: his established roads; and
Petitioner claims that the respondent Court
15
of Appeals erred in holding that (1) the 4. The transportation must be for hire.

Averell B. Abrasaldo – II-Sanchez Roman 24


CREDIT TRANSACTIONS – II. COMMON CARRIERS IN GENERAL (A. Civil Code definition of a common carrier; Tests)
Cases
Based on the above definitions and the notion of "public service," under common carriers transporting goods and
requirements, there is no doubt that the Public Service Act passengers through moving vehicles or
petitioner is a common carrier. It is engaged (Commonwealth Act No. 1416, as vessels either by land, sea or water, is
in the business of transporting or carrying amended) which at least partially erroneous.
goods, i.e. petroleum products, for hire as a supplements the law on common
public employment. It undertakes to carry for carriers set forth in the Civil Code. As correctly pointed out by petitioner, the
all persons indifferently, that is, to all Under Section 13, paragraph (b) of definition of "common carriers" in the Civil
persons who choose to employ its services, the Public Service Act, "public Code makes no distinction as to the means
and transports the goods by land and for service" includes: of transporting, as long as it is by land, water
compensation. The fact that petitioner has a or air. It does not provide that the
limited clientele does not exclude it from the every person that now or hereafter transportation of the passengers or goods
definition of a common carrier. In De Guzman may own, operate. manage, or control should be by motor vehicle. In fact, in the
16
vs. Court of Appeals we ruled that: in the Philippines, for hire or United States, oil pipe line operators are
17
compensation, with general or limited considered common carriers.
The above article (Art. 1732, Civil clientele, whether permanent,
Code) makes no distinction between occasional or accidental, and done Under the Petroleum Act of the Philippines
one whose principal business activity for general business purposes, any (Republic Act 387), petitioner is considered a
is the carrying of persons or goods or common carrier, railroad, street "common carrier." Thus, Article 86 thereof
both, and one who does such railway, traction railway, subway provides that:
carrying only as an ancillary activity motor vehicle, either for freight or
(in local idiom, as a "sideline"). passenger, or both, with or without
Art. 86. Pipe line concessionaire as common
Article 1732 . . . avoids making any fixed route and whatever may be its
carrier. — A pipe line shall have the
distinction between a person or classification, freight or carrier preferential right to utilize installations for
enterprise offering transportation service of any class, express service, the transportation of petroleum owned by
service on a regular or scheduled steamboat, or steamship line,
him, but is obligated to utilize the remaining
basis and one offering such service pontines, ferries and water
transportation capacity pro rata for the
on an occasional, episodic or craft, engaged in the transportation
transportation of such other petroleum as
unscheduled basis. Neither does of passengers or freight or both,
may be offered by others for transport, and
Article 1732 distinguish between a shipyard, marine repair shop, wharf
to charge without discrimination such rates
carrier offering its services to the or dock, ice plant, ice-refrigeration
as may have been approved by the Secretary
"general public," i.e., the general plant, canal, irrigation system gas,
of Agriculture and Natural Resources.
community or population, and one electric light heat and power, water
who offers services or solicits supply andpower
business only from a narrow segment petroleum, sewerage system, wire or Republic Act 387 also regards petroleum
of the general population. We think wireless communications systems, operation as a public utility. Pertinent portion
that Article 1877 deliberately wire or wireless broadcasting of Article 7 thereof provides:
refrained from making such stations and other similar public
distinctions. services. (Emphasis Supplied) that everything relating to the
exploration for and exploitation of
So understood, the concept of Also, respondent's argument that the term petroleum . . . and everything relating
"common carrier" under Article 1732 "common carrier" as used in Section 133 (j) to the manufacture, refining, storage,
may be seen to coincide neatly with of the Local Government Code refers only to or transportation by special methods

Averell B. Abrasaldo – II-Sanchez Roman 25


CREDIT TRANSACTIONS – II. COMMON CARRIERS IN GENERAL (A. Civil Code definition of a common carrier; Tests)
Cases
of petroleum, is hereby declared to be The deliberations conducted in the House of What we want to guard against here, Mr.
a public utility. (Emphasis Supplied) Representatives on the Local Government Speaker, is the imposition of taxes by local
Code of 1991 are illuminating: government units on the carrier business.
The Bureau of Internal Revenue likewise Local government units may impose taxes on
considers the petitioner a "common carrier." MR. AQUINO (A). Thank you, Mr. Speaker. top of what is already being imposed by the
In BIR Ruling No. 069-83, it declared: National Internal Revenue Code which is the
Mr. Speaker, we would like to proceed to so-called "common carriers tax." We do not
. . . since [petitioner] is a pipeline want a duplication of this tax, so we just
page 95, line
provided for an exception under Section 125
concessionaire that is engaged only
[now Sec. 137] that a province may impose
in transporting petroleum products, it 1. It states: "SEC. 121 [now Sec. 131].
is considered a common carrier this tax at a specific rate.
Common Limitations on the Taxing Powers
under Republic Act No. 387 . . . . Such of Local Government Units." . . .
being the case, it is not subject to MR. AQUINO (A.). Thank you for that
18
withholding tax prescribed by clarification, Mr. Speaker. . . .
MR. AQUINO (A.). Thank you Mr. Speaker.
Revenue Regulations No. 13-78, as
amended. It is clear that the legislative intent in
Still on page 95, subparagraph 5, on taxes on excluding from the taxing power of the local
the business of transportation. This appears government unit the imposition of business
From the foregoing disquisition, there is no
to be one of those being deemed to be tax against common carriers is to prevent a
doubt that petitioner is a "common carrier"
exempted from the taxing powers of the local duplication of the so-called "common
and, therefore, exempt from the business tax
government units. May we know the reason carrier's tax."
as provided for in Section 133 (j), of the Local why the transportation business is being
Government Code, to wit: excluded from the taxing powers of the local
Petitioner is already paying three (3%)
government units?
Sec. 133. Common Limitations on the Taxing percent common carrier's tax on its gross
Powers of Local Government Units. — sales/earnings under the National Internal
MR. JAVIER (E.). Mr. Speaker, there is an 19
Revenue Code. To tax petitioner again on
Unless otherwise provided herein, the exception contained in Section 121 (now Sec.
exercise of the taxing powers of provinces, its gross receipts in its transportation of
131), line 16, paragraph 5. It states that local petroleum business would defeat the
cities, municipalities, and barangays shall
government units may not impose taxes on purpose of the Local Government Code.
not extend to the levy of the following: the business of transportation, except as
otherwise provided in this code.
xxx xxx xxx WHEREFORE, the petition is hereby
GRANTED. The decision of the respondent
Now, Mr. Speaker, if the Gentleman would Court of Appeals dated November 29, 1995 in
(j) Taxes on the gross receipts of care to go to page 98 of Book II, one can see CA-G.R. SP No. 36801 is REVERSED and SET
transportation contractors and there that provinces have the power to
persons engaged in the ASIDE.
impose a tax on business enjoying a
transportation of passengers or franchise at the rate of not more than one-
freight by hire and common carriers half of 1 percent of the gross annual receipts. SO ORDERED.
by air, land or water, except as So, transportation contractors who are
provided in this Code. enjoying a franchise would be subject to tax G.R. No. 148496 March 19, 2002
by the province. That is the exception, Mr.
Speaker.

Averell B. Abrasaldo – II-Sanchez Roman 26


CREDIT TRANSACTIONS – II. COMMON CARRIERS IN GENERAL (A. Civil Code definition of a common carrier; Tests)
Cases
VIRGINES CALVO doing business under the Services, Inc. From July 23 to July 25, 1990, " . . . we opine that damages
name and style TRANSORIENT CONTAINER petitioner, pursuant to her contract with SMC, sustained by shipment is
TERMINAL SERVICES, INC., petitioner, withdrew the cargo from the arrastre operator attributable to improper handling
vs. and delivered it to SMC's warehouse in Ermita, in transit presumably whilst in
UCPB GENERAL INSURANCE CO., INC. Manila. On July 25, 1990, the goods were the custody of the broker . . . ."
(formerly Allied Guarantee Ins. Co., inspected by Marine Cargo Surveyors, who
Inc.) respondent. found that 15 reels of the semi-chemical fluting is a finding which cannot be traversed
paper were "wet/stained/torn" and 3 reels of kraft and overturned.
MENDOZA, J.: liner board were likewise torn. The damage was
placed at P93,112.00. The evidence adduced by the
This is a petition for review of the defendants is not enough to sustain [her]
1
decision, dated May 31, 2001, of the Court of SMC collected payment from respondent UCPB defense that [she is] are not liable.
2
Appeals, affirming the decision of the Regional under its insurance contract for the Defendant by reason of the nature of
Trial Court, Makati City, Branch 148, which aforementioned amount. In turn, respondent, as [her] business should have devised
ordered petitioner to pay respondent, as subrogee of SMC, brought suit against petitioner ways and means in order to prevent the
subrogee, the amount of P93,112.00 with legal in the Regional Trial Court, Branch 148, Makati damage to the cargoes which it is under
interest, representing the value of damaged City, which, on December 20, 1995, rendered obligation to take custody of and to
cargo handled by petitioner, 25% thereof as judgment finding petitioner liable to respondent forthwith deliver to the consignee.
attorney's fees, and the cost of the for the damage to the shipment. Defendant did not present any evidence
suit.1âwphi1.nêt on what precaution [she] performed to
The trial court held: prevent [the] said incident, hence the
The facts are as follows: presumption is that the moment the
It cannot be denied . . . that the subject defendant accepts the cargo [she] shall
cargoes sustained damage while in the perform such extraordinary diligence
Petitioner Virgines Calvo is the owner of
Transorient Container Terminal Services, Inc. custody of defendants. Evidence such because of the nature of the cargo.
(TCTSI), a sole proprietorship customs broker. as the Warehouse Entry Slip (Exh. "E");
At the time material to this case, petitioner the Damage Report (Exh. "F") with ....
entered into a contract with San Miguel entries appearing therein, classified as
Corporation (SMC) for the transfer of 114 reels "TED" and "TSN", which the claims Generally speaking under Article 1735 of
of semi-chemical fluting paper and 124 reels of processor, Ms. Agrifina De Luna, the Civil Code, if the goods are proved
kraft liner board from the Port Area in Manila to claimed to be tearrage at the end and to have been lost, destroyed or
SMC's warehouse at the Tabacalera Compound, tearrage at the middle of the subject deteriorated, common carriers are
Romualdez St., Ermita, Manila. The cargo was damaged cargoes respectively, coupled presumed to have been at fault or to
insured by respondent UCPB General Insurance with the Marine Cargo Survey Report have acted negligently, unless they
Co., Inc. (Exh. "H" - "H-4-A") confirms the fact of prove that they have observed the
the damaged condition of the subject extraordinary diligence required by law.
cargoes. The surveyor[s'] report (Exh. The burden of the plaintiff, therefore, is
On July 14, 1990, the shipment in question,
"H-4-A") in particular, which provides to prove merely that the goods he
contained in 30 metal vans, arrived in Manila on
board "M/V Hayakawa Maru" and, after 24 among others that: transported have been lost, destroyed or
hours, were unloaded from the vessel to the deteriorated. Thereafter, the burden is
custody of the arrastre operator, Manila Port shifted to the carrier to prove that he has

Averell B. Abrasaldo – II-Sanchez Roman 27


CREDIT TRANSACTIONS – II. COMMON CARRIERS IN GENERAL (A. Civil Code definition of a common carrier; Tests)
Cases
exercised the extraordinary diligence The decision was affirmed by the Court of the same to select parties with whom she may
required by law. Thus, it has been held Appeals on appeal. Hence this petition for contract in the conduct of her business.
that the mere proof of delivery of goods review on certiorari.
in good order to a carrier, and of their The contention has no merit. In De Guzman v.
arrival at the place of destination in bad Petitioner contends that:
7
Court of Appeals, the Court dismissed a similar
order, makes out a prima facie case contention and held the party to be a common
against the carrier, so that if no I. THE COURT OF APPEALS carrier, thus -
explanation is given as to how the injury COMMITTED SERIOUS AND
occurred, the carrier must be held
REVERSIBLE ERROR [IN] DECIDING The Civil Code defines "common carriers" in the
responsible. It is incumbent upon the
THE CASE NOT ON THE EVIDENCE following terms:
carrier to prove that the loss was due to
PRESENTED BUT ON PURE
accident or some other circumstances
SURMISES, SPECULATIONS AND "Article 1732. Common carriers are
inconsistent with its liability." (cited in
MANIFESTLY MISTAKEN INFERENCE. persons, corporations, firms or
Commercial Laws of the Philippines by
Agbayani, p. 31, Vol. IV, 1989 Ed.) associations engaged in the business of
II. THE COURT OF APPEALS carrying or transporting passengers or
COMMITTED SERIOUS AND goods or both, by land, water, or air for
Defendant, being a customs brother,
REVERSIBLE ERROR IN compensation, offering their services to
warehouseman and at the same time a
CLASSIFYING THE PETITIONER AS A the public."
common carrier is supposed [to]
COMMON CARRIER AND NOT AS
exercise [the] extraordinary diligence
PRIVATE OR SPECIAL CARRIER WHO The above article makes no distinction
required by law, hence the extraordinary
DID NOT HOLD ITS SERVICES TO between one whose principal business
responsibility lasts from the time the 5
THE PUBLIC. activity is the carrying of persons or
goods are unconditionally placed in the
possession of and received by the goods or both, and one who does such
carrier for transportation until the same It will be convenient to deal with these carrying only as an ancillary activity . . .
are delivered actually or constructively contentions in the inverse order, for if petitioner Article 1732 also carefully avoids making
by the carrier to the consignee or to the is not a common carrier, although both the trial any distinction between a person or
person who has the right to receive the court and the Court of Appeals held otherwise, enterprise offering transportation service
same.
3 then she is indeed not liable beyond what on a regular or scheduled basis and one
ordinary diligence in the vigilance over the goods offering such service on an occasional,
transported by her, would episodic or unscheduled basis. Neither
Accordingly, the trial court ordered petitioner to 6
require. Consequently, any damage to the does Article 1732 distinguish between a
pay the following amounts -- cargo she agrees to transport cannot be carrier offering its services to the
presumed to have been due to her fault or "general public," i.e., the general
1. The sum of P93,112.00 plus interest; negligence. community or population, and one who
offers services or solicits business only
2. 25% thereof as lawyer's fee; Petitioner contends that contrary to the findings from a narrow segment of the general
of the trial court and the Court of Appeals, she is population. We think that Article 1732
3. Costs of suit.
4
not a common carrier but a private carrier deliberately refrained from making such
because, as a customs broker and distinctions.
warehouseman, she does not indiscriminately
hold her services out to the public but only offers

Averell B. Abrasaldo – II-Sanchez Roman 28


CREDIT TRANSACTIONS – II. COMMON CARRIERS IN GENERAL (A. Civil Code definition of a common carrier; Tests)
Cases
So understood, the concept of "common broadcasting stations and other shipment, and to exercise due care in
8
carrier" under Article 1732 may be seen similar public services. x x x" the handling and stowage, including
to coincide neatly with the notion of such methods as their nature requires."
"public service," under the Public There is greater reason for holding petitioner to
Service Act (Commonwealth Act No. be a common carrier because the transportation In the case at bar, petitioner denies liability for
1416, as amended) which at least of goods is an integral part of her business. To the damage to the cargo. She claims that the
partially supplements the law on uphold petitioner's contention would be to "spoilage or wettage" took place while the goods
common carriers set forth in the Civil deprive those with whom she contracts the were in the custody of either the carrying vessel
Code. Under Section 13, paragraph (b) protection which the law affords them "M/V Hayakawa Maru," which transported the
of the Public Service Act, "public notwithstanding the fact that the obligation to cargo to Manila, or the arrastre operator, to
service" includes: carry goods for her customers, as already noted, whom the goods were unloaded and who
is part and parcel of petitioner's business. allegedly kept them in open air for nine days
" x x x every person that now or from July 14 to July 23, 1998 notwithstanding
hereafter may own, operate, Now, as to petitioner's liability, Art. 1733 of the the fact that some of the containers were
manage, or control in the Civil Code provides: deformed, cracked, or otherwise damaged, as
Philippines, for hire or noted in the Marine Survey Report (Exh. H), to
compensation, with general or wit:
Common carriers, from the nature of
limited clientele, whether
their business and for reasons of public
permanent, occasional or MAXU-2062880 - rain gutter
policy, are bound to observe
accidental, and done for general deformed/cracked
extraordinary diligence in the vigilance
business purposes, any
over the goods and for the safety of the
common carrier, railroad, street
passengers transported by them, ICSU-363461-3 - left side rubber
railway, traction railway, subway according to all the circumstances of gasket on door distorted/partly loose
motor vehicle, either for freight
each case. . . .
or passenger, or both, with or
without fixed route and whatever PERU-204209-4 - with pinholes on
9
may be its classification, freight In Compania Maritima v. Court of Appeals, the roof panel right portion
or carrier service of any class, meaning of "extraordinary diligence in the
express service, steamboat, or vigilance over goods" was explained thus: TOLU-213674-3 - wood flooring
steamship line, pontines, ferries we[t] and/or with signs of water soaked
and water craft, engaged in the The extraordinary diligence in the
transportation of passengers or vigilance over the goods tendered for MAXU-201406-0 - with dent/crack
freight or both, shipyard, marine shipment requires the common carrier to on roof panel
repair shop, wharf or dock, ice know and to follow the required
plant, ice-refrigeration plant, precaution for avoiding damage to, or
ICSU-412105-0 - rubber gasket
canal, irrigation system, gas, destruction of the goods entrusted to it
on left side/door panel partly detached
electric light, heat and power, for sale, carriage and delivery. It 10
loosened.
water supply and power requires common carriers to render
petroleum, sewerage system, service with the greatest skill and
foresight and "to use all reasonable In addition, petitioner claims that Marine Cargo
wire or wireless communications
means to ascertain the nature and Surveyor Ernesto Tolentino testified that he has
systems, wire or wireless
characteristic of goods tendered for no personal knowledge on whether the container
vans were first stored in petitioner's warehouse

Averell B. Abrasaldo – II-Sanchez Roman 29


CREDIT TRANSACTIONS – II. COMMON CARRIERS IN GENERAL (A. Civil Code definition of a common carrier; Tests)
Cases
prior to their delivery to the consignee. She [withdrawn] by Transorient Container shall be presumed that the loss (or
likewise claims that after withdrawing the Services, Inc. . . . without exception. damage) was due to his fault, unless
container vans from the arrastre operator, her there is proof to the contrary. No proof
driver, Ricardo Nazarro, immediately delivered [The cargo] was finally delivered to the was proffered to rebut this legal
the cargo to SMC's warehouse in Ermita, Manila, consignee's storage warehouse located presumption and the presumption of
which is a mere thirty-minute drive from the Port at Tabacalera Compound, Romualdez negligence attached to a common
Area where the cargo came from. Thus, the Street, Ermita, Manila from July 23/25, carrier in case of loss or damage to the
13
damage to the cargo could not have taken place 1990.
12 goods.
11
while these were in her custody.
As found by the Court of Appeals: Anent petitioner's insistence that the cargo could
Contrary to petitioner's assertion, the Survey not have been damaged while in her custody as
Report (Exh. H) of the Marine Cargo Surveyors From the [Survey Report], it [is] clear she immediately delivered the containers to
indicates that when the shipper transferred the SMC's compound, suffice it to say that to prove
that the shipment was discharged from
cargo in question to the arrastre operator, these the exercise of extraordinary diligence, petitioner
the vessel to the arrastre, Marina Port
were covered by clean Equipment Interchange must do more than merely show the possibility
Services Inc., in good order and
Report (EIR) and, when petitioner's employees that some other party could be responsible for
condition as evidenced by clean
withdrew the cargo from the arrastre operator, the damage. It must prove that it used "all
Equipment Interchange Reports (EIRs).
they did so without exception or protest either reasonable means to ascertain the nature and
Had there been any damage to the
with regard to the condition of container vans or characteristic of goods tendered for [transport]
shipment, there would have been a
their contents. The Survey Report pertinently and that [it] exercise[d] due care in the handling
report to that effect made by the arrastre
reads -- operator. The cargoes were withdrawn [thereof]." Petitioner failed to do this.
by the defendant-appellant from the
Details of Discharge: arrastre still in good order and condition Nor is there basis to exempt petitioner from
as the same were received by the liability under Art. 1734(4), which provides --
Shipment, provided with our protective former without exception, that is, without
supervision was noted discharged ex any report of damage or loss. Surely, if Common carriers are responsible for the
vessel to dock of Pier #13 South Harbor, the container vans were deformed, loss, destruction, or deterioration of the
Manila on 14 July 1990, containerized cracked, distorted or dented, the goods, unless the same is due to any of
onto 30' x 20' secure metal vans, defendant-appellant would report it the following causes only:
covered by clean EIRs. Except for slight immediately to the consignee or make
dents and paint scratches on side and an exception on the delivery receipt or ....
roof panels, these containers were note the same in the Warehouse Entry
deemed to have [been] received in good Slip (WES). None of these took place. (4) The character of the goods or
condition. To put it simply, the defendant-appellant defects in the packing or in the
received the shipment in good order and
containers.
.... condition and delivered the same to the
consignee damaged. We can only
conclude that the damages to the cargo ....
Transfer/Delivery:
occurred while it was in the possession
of the defendant-appellant. Whenever For this provision to apply, the rule is that if the
On July 23, 1990, shipment housed onto the thing is lost (or damaged) in the improper packing or, in this case, the defect/s in
30' x 20' cargo containers was possession of the debtor (or obligor), it the container, is/are known to the carrier or his

Averell B. Abrasaldo – II-Sanchez Roman 30


CREDIT TRANSACTIONS – II. COMMON CARRIERS IN GENERAL (A. Civil Code definition of a common carrier; Tests)
Cases
employees or apparent upon ordinary
observation, but he nevertheless accepts the
same without protest or exception
notwithstanding such condition, he is not
relieved of liability for damage resulting
14
therefrom. In this case, petitioner accepted the
cargo without exception despite the apparent
defects in some of the container vans. Hence,
for failure of petitioner to prove that she
exercised extraordinary diligence in the carriage
of goods in this case or that she is exempt from
liability, the presumption of negligence as
15
provided under Art. 1735 holds.

WHEREFORE, the decision of the Court of


Appeals, dated May 31, 2001, is
AFFIRMED.1âwphi1.nêt

SO ORDERED.

Averell B. Abrasaldo – II-Sanchez Roman 31

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